Does 'Culture' Matter In Pension Organizations?
“Culture is a system of shared values that define what is important….and norms that define appropriate attitudes and behaviors for members of the organization.”
O’Reilly and Chatman
“Culture is a pattern of shared assumptions that has been learned by a group…. that has worked well enough to be considered valid….and therefore to be taught to new members as the correct way to perceive, think, and feel about matters of importance to the organization….”.
Addressing the ‘Culture’ Question
Given the two definitions abovei, is ‘culture’ something worth considering in the design,governance, and management of pension organizations? Roger Urwin and Andy Lo certainly think so. Roger has been addressing the culture question recently on the conference circuit. Prof. Lo has just published a 38-page paper on the topic titled “The Gordon Gekko Effect: The Role of Culture in the Financial Industry”.ii
Reflecting back on previous Letter topics, we too have touched on the organizational culture question in such contexts as defining and measuring the ‘value’ pension organizations should be producing for their stakeholders, setting out the meaning and implications of ‘fiduciary duty’, communicating clearly with stakeholders, and designing and implementing effective compensation structures. Having said that, this Letter is the first to address the culture question head-on. Following the structure of Lo’s paper, we explore the meaning of culture, why it is important, and how to foster a ‘good’ culture in your organization.