Why Businesses Fail: culture is the essence of all business success, and it has a ripple effect.


My sweet spot has been boardroom advisory focussing on insolvency and restructuring but increasingly this leads me to question why businesses fail, how they can improve, and what steps they need to take. This has led to my greater consideration of governance and ESG, getting involved in various ESG initiatives at Howard Kennedy and lecturing on ESG and Director’s Duties, I’ve become most interested in ESG as a holistic approach to business analysis and increasingly lecture on the wider issues around staff engagement and culture - and in doing so the overriding view that I’ve formed is that culture is absolutely the essence of all business success and failure.

Culture is the fusion of the processes, procedures, and rules of your governance structure with the behaviours, attitudes, and views of your people. If you've got a misalignment of these inputs, you get a poor culture. With good alignment you get a good culture. The desired culture is a subjective assessment depending upon the nature of the business, its purpose and vision, and will be in a constant state of flux depending upon who leaves and who joins, external factors impacting the business and wider socio-economic changes.

In the last nine months, I've re-thought what ESG is and what it isn't. It started out as a supercharged CSR coming from corporate philanthropy, but it's more than that. While ESG has a whole raft of legislation and regulation it's more than just legal.

Is it about doing business better? An environmental and social justice imperative for businesses to view people, planet, and profit in equal measure, such as seen with the B Corp and Teal movements? The driver is “let's make the world better”. However, I have come to believe that ESG is not about a business deciding what is or is not better for people and planet.

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