developing cultural capital – board level impact
by Nagaraja Kumar Deevi Building Cultural Capital is an evolving challenge across the Industries, not just a Banking and Financial Services Industry issue. In the recent months, financial services regulatory agencies in the US and UK are leading the effort in addressing the challenges. Cultural Capital, unlike Financial Capital, Economic Capital, Regulatory Capital, and Liquidity Capital can’t be measured in financial numbers, income, or net worth. Cultural Capital, on the other hand, deals with human capital that includes behavioral aspects, skills and knowledge of employees rather than the product and design lifecycle methodologies, revenue and growth forecasting models, that run against large population of data. Cultural Capital is both a tangible and an intangible asset and is the employees’ collective wisdom working across the business lines within the organization and its impact on the society. It is not just a task that is identified, validated on a monthly or quarterly basis, and closed after the annual performance measure. Developing Cultural Capital is not an independent business function or a sole responsibility of just the CEOs or boards of directors. Cultural Capital Framework must come from both top-down approach and bottom-up approach with an oversight on monitoring and driving effective influence of the workforce to overcome the social stigma, ethical paradox in decision-making and cultural misconceptions. Building Cultural Capital is growing concern. Building Culture includes accumulation of knowledge, behaviors, education, skills, and evolves along with the organization growth, while retaining the business values. It is hard to quantify the Organizational Culture as it is often based on perceptions, personal motivations, blindness to objective consequence and failure to consider the ethical dimensions of decisions.
developing culture is a mission critical task Defining an Organizational purpose, that encompasses employees and management with shared values, code of conduct embedded within Ethical Policy, and communicating the cohesive cultural values effectively, is the foremost responsibility of the management in every organization. Understandably, cultural change is a long journey, especially in a toxic environment, where trust and integrity of the leaders are measured. One of the difficult processes is of developing a framework with “meaningful value” with economic measure. Emerging technologies, including social media, create and contribute to different ethical experiences and challenges. Management teams must consider behavioral phenomena, ascertain that the AI systems that are created generate reliable outcomes, avoid overreliance on AI to cover the bias in effective decision making and achieving optional results.
Intelligent Risk - April 2020
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