Thursday, August 18, 2005

The Value of Corporate Values

An outstanding in-depth article on the Value of Corporate Values can be found in an article by Reggie Van Lee, Lisa Fabish, and Nancy McGaw in this month's S+B.

Based on a survey at 365 companies in 30 countries, the authors claim "increasingly, companies around the world have adopted formal statements of corporate values, and senior executives now routinely identify ethical behavior, honesty, integrity, and social concerns as top issues on their companies’ agendas".

The highlights of the survey and article are:

  1. A large number of companies are making their values explicit. That’s a change — quite a significant change — from corporate practices 10 years ago. The ramifications of this shift are just beginning to be understood.
  2. Ethical behavior is a core component of company activities.
  3. Most companies believe values influence two important strategic areas — relationships and reputation — but do not see the direct link to growth.
  4. Most companies are not measuring their “ROV.”
  5. Top performers consciously connect values and operations.
  6. Values practices vary significantly by (continental) region.
  7. The CEO’s tone really matters.

The article provides quantitative data about these 7 findings and concludes with "A commitment to corporate values may be in vogue, but the public will remain suspicious until corporations both understand and can demonstrate that they are committed to using values to create value".