What national governance codes say about corporate culture

• Pages: 903-917
• DOI: https://doi.org/10.1108/CG-08-2019-0254
• Published date: 15 June 2020
• Date: 15 June 2020
• Author: Marie-Fleur Lobrij,Muel Kaptein,Mijntje Lückerath-Rovers
• Subject Matter: Corporate governance,Strategy

What national governance codes say

about corporate culture

Marie-Fleur Lobrij, Muel Kaptein and Mijntje Lückerath-Rovers

Abstract

Purpose –This studyaims to provide insight into the current incorporationof corporate culture in national

corporate governancecodes. The authors identify three levels of incorporation for each of the following

three dimensions: layers of corporate culture (the ‘‘what’’), the alignment of corporate culture in the

organization(the ‘‘for whom’’) and the board’sroles regarding corporate culture(the ‘‘how’’).

Design/methodology/approach –To assess the extent to which national codes have incorporated

corporate culture, the authors used a sample of 88 national corporate governance codes. The authors

performeda content analysis of these codes using a computer-aidedtext analysis program. The first step

involved the identificationof dimensions of corporate culture per nationalcode. These dimensions were

then assessed based on three levels of incorporation. Finally, the authors ranked national codes with

similarlevels of incorporation per dimension and aggregatedthe dimensions.

Findings –The data show that five of the 88 national corporate governance codes that the authors

analysedscored the highest level in all three dimensionsof corporate culture.

Originality/value –This is the first study to provide an overviewof what national corporate governance

codes say about corporate culture. The authors address two gaps in the existing literature. First, the

authors develop and use a richer conceptualization of how corporate culture can be addressed in

national corporate governance codes. Second, theauthors analyse these corporate governance codes

worldwide.

Keywords Organizational culture, Corporate culture, Organizational climate, Informal governance,

Corporate governance code

Paper type Research paper

Introduction

In 2017, the revised Dutch corporate governance code for listed companies in The

Netherlands came into force. One of the major changes in this code, compared to

the previous version of 2008, was the introduction of the concept of culture. The revised

code requires companies to create a culture that promotes desired behaviour within the

corporation. It states that the executive board “should adopt values for the company and is

responsible for the incorporation and maintenance of the values within the company” (p.

26). The code also states that both the executive board and the supervisory board are

responsible for “stimulating openness and accountability within the organ of which they

form part and between the different organs within the company” (p. 24). The introduction of

the concept of culture in the Dutch corporate governance code raises the questions of why

corporate culture is a relevant corporate governance concept and to what extent other

national corporate governancecodes currently incorporate this concept.

In the corporate governance literature, the relevance of corporate culture is described in

relation to the role modelling of boards and in relationto the performance of corporations. In

relation to the role modelling of boards, several academics advocate the responsibility of

boards for shaping and ensuring the right corporate culture by the board’s behaviour. For

example, Soltani (2014) argues that board members should set the right “tone at the top”,

Marie-Fleur Lobrij and

Muel Kaptein are both

based at the Rotterdam

School of Management,

Erasmus University,

Rotterdam, The

Netherlands.

Mijntje Lu

¨ckerath-Rovers is

based at TIAS School for

Business and Society,

Tilburg University, Tilburg,

The Netherlands.

Received 15 August 2019

Revised 27 November 2019

24 April 2020

Accepted 14 May 2020

©Marie-Fleur Lobrij,

Muel Kaptein and

Mijntje Lu

¨ckerath-Rovers.

Published by Emerald

Publishing Limited. This article

is published under the Creative

Commons Attribution (CC BY

4.0) licence. Anyone may

reproduce, distribute, translate

and create derivative works of

this article (for both commercial

and non-commercial

purposes), subject to full

attribution to the original

publication and authors. The

full terms of this licence may be

seen at http://creativecommons.

org/licences/by/4.0/legalcode

The authors would like to thank

the participants in the 33rd

EGOS Colloquium and

Wempe for their useful

comments on an earlier version

of this article.

DOI 10.1108/CG-08-2019-0254 VOL. 20 NO. 5 2020, pp. 903-917, Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 903