Shared values are essential to provide cohesion in a company that is global and diverse.
Once values have been established and communicated, they must be rigorously followed in practice and people held accountable for observing them.
Tomorrow’s global companies need both values and rules, but values provide the bedrock upon which a company’s behaviour should be based.
Because of their scale, power and influence, tomorrow’s global companies will have an important wider role as carriers of human values - for good or ill. If they fail to set high standards, others outside the company will find it easier to tolerate corruption, fraud and human rights violations. However, if they do act as role models, they will add value to the health of the societies in which they operate.
Many companies are not trusted because they do not speak clearly about what they stand for. If global companies are to take a wider view of their responsibilities without being open to the charge that they are abusing their influence, it is even more important that they set out their values clearly.
Corporate values at their simplest are what a company stands for - the qualities it aspires to demonstrate and considers important.
Values provide a global core of consistency in a company which operates in many diverse countries.
Without the bedrock of values, companies cannot hope to influence the behaviour of tens of thousands of people in millions of everyday encounters.
Shared values help build strong and loyal teams, solid reputations and trusting relationships. Through their effect on brand and reputation they can help companies attract customers, employees and investors. Applied over time, they ensure that those outside the company know what to expect from its people.
Establishing values
Each company must choose its own values. They must be derived from, and tailored to, a company’s particular needs and developed and agreed through processes of internal discussion. For values to be meaningful and effective, they must have the support of the employees, customers and wider society in which the company operates.
When a company’s values resonate with ones that are widely held, a company will be able to cross cultural boundaries and bind its people together. This provides a stronger basis for dealing with dilemmas and building trust. Companies can draw guidance from each other or from initiatives such as the Global Compact which incorporates principles based on the major UN Declarations on Human Rights, Environment and Development and Corruption as well as the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. In setting values, companies also need to understand what qualities inspire people throughout the business. By blending the convictions of leaders and employees, they can articulate what the company stands for at its best.
Reinforcing the values
Leaders need to show by example what behaviour is expected. It takes time, resources and persistence to embed values to ensure that they are lived in practice. A survey undertaken by the Bertelsmann Foundation of 231 executives from various companies found that only 118 saw a correlation between words and deeds in their companies.40
In small companies, values are more easily spread by example. In large and dispersed companies, there is more reason to set the values out in some written form.41
Effective communications programmes are needed to make sure the values are understood and discussed. These often involve stories about teams or individuals who are role models in living out their values.