Have box, will tick? The UK Corporate Governance Code and Culture.

davidjamesgrosse
Dec 9, 2025
4 min read

1) Boxes

As we move into 2026, I am looking forward to reading in more detail on how UK Company Boards have been not only been “assessing and monitoring” their culture, but also evaluating how the desired culture has been “embedded” across the organization.

For those who have been slumbering and missed it (shame on you) revisions to the UK Corporate Governance Code in 2024 included enhanced culture requirements, re-enforcing it as a core component of corporate governance[i].

The revised Code came into effect for financial periods beginning on or after 1 January 2025, so hopefully those provisions are already being diligently followed as required[ii].

And 12 months on, as the first accounting cycles are completed, we will see more concrete information from Companies on how it is being evidenced and achieved.

2) Ticks

But I admit to feeling some queasiness.

How will Boards be gaining periodic assurance from their management that the desired culture is effectively embedded? Using what internal or external capability and insight?

Will there be deeper behavioural expertise and understanding applied to the challenge, or will a familiar and limited menu of values, communications, training and surveys be rolled out, as a poor proxy for reality?

Will Board packs have multi coloured culture dashboards and metrics that fall prey to the streetlight effect, and provide an illusion of control?

Will external purveyors of culture snake oil provide lift and drop solutions, promising that if you do A, B and C, you will arrive at D?

If the intent of the new Code is to elevate the focus on culture from a check-box or reporting exercise, to something requiring deeper understanding, ongoing governance, oversight and integration, then how can that be navigated without creating unintended consequences?

3) Reality

A good first step would be to recognize the messy reality of culture, the complex behavioural landscape that exists across hundreds or thousands of staff and multiple teams & locations.

To explore the multiple drivers and influences of behaviour, that can be social, environmental, contextual as well as individual.

To value and nurture genuine behavioural insight, expertise and capability. To rebalance the mechanical and quantitative with the perceptive and qualitative.

To be curious about what you don’t know and honest about the limitations of what you do.

But will Management, Boards, Auditors, Regulators and the Financial Reporting Council recognize the imperative of these mature approaches, or will the drive to simplify, standardize, measure, explain and control exert it’s inexorable gravitational pull?

4) To Date

An initial insight on the approaches taken by Companies can be found in the latest FRC Annual Review of Corporate Governance Reporting issued in November 2025[iii].

Some key comments from the FRC on Culture included:

“It is encouraging to see continued progress in how companies report on culture, reflecting a growing recognition of the value a strong corporate culture brings to long-term success. While transparent and meaningful reporting on culture is important, it should remain concise and purposeful”.

“While most companies in our sample referenced embedding culture, many did so in a generic way, lacking meaningful insight. Often, they described how specific behaviours were embedded, but not how the overall culture is integrated across the organisation”.

“the Code says that ‘the board should establish a company’s purpose, values and strategy, and satisfy itself that these and its culture are all aligned. All directors must act with integrity, lead by example and promote the desired culture’. It is disappointing to see that reporting on how directors fulfil this responsibility remains weak across much of our sample. While many companies made general references to culture promotion, the majority failed to provide insight into the specific actions directors are taking to embed the company’s desired culture”.

The Company culture examples used in the FRC review (Foxtons, Evoke, Haleon, Smith & Nephew) are a mixed bag, with the usual focus on purported “alignment” between culture, purpose, values and strategy, but with limited insight on how they understand the behavioural reality.

And these are (presumably) the better examples deemed worthy of calling out.

The FRC paper also notes that, in several cases, disclosures by firms on Culture alignment were limited to just repeating the wording of the Code, by Companies stating that:

‘The Board has established the Company’s purpose, values and strategy, and has satisfied itself that these and its culture are aligned’.

A naïve and troubling approach, that should leave investors and other stakeholders querying both the curiosity and capabilities of the Board and the level of corporate cultural understanding.

5) 2026

I’ll be keeping an eye out for how Companies claim they are tackling the new requirements of the Code, and flagging cases of the good, the bad and the indifferent.

And if you are aware of any interesting or outlier examples please do share.

The FRC are to be applauded in further elevating the importance of Culture in the revised UK Corporate Governance Code.

Nonetheless there are dangers in the very process and focus itself.

Will it lead to “we must be seen to be doing something” and the splicing together of disparate initiatives under the loose umbrella of culture, or will it lead to Companies embracing deeper behavioural approaches and insights.

And are those entrusted to monitor the progress aware of the difference?