Insights


Aligning Corporate Culture with Long-Term Strategy

  • Before the 2019 proxy season, Cyrus Taraporevala urged board chairs and lead directors at publicly traded companies to help investors better understand how their company culture aligns with their long-term strategy
  • Cyrus examined the impact of “intangible assets,” such as corporate culture, on company performance

Cyrus Taraporevala
Chief Executive Officer

On the eve of the 2019 proxy season, State Street Global Advisors President & CEO Cyrus Taraporevala is calling on board chairs and lead directors at companies around the globe to help investors better understand how their company culture aligns with their long-term strategy.

As part of our continued focus on good governance and other practices that affect long-term investor returns — from gender diversity to environmental sustainability — Cyrus examines the impact of “intangible assets” such as corporate culture on company performance. On average, such assets account for 52% of an organization’s market value (and in some sectors as much as 90%)1.


However, State Street’s past engagements with companies have revealed that few directors can adequately articulate their company culture or demonstrate how they assess, monitor and influence change.

Cyrus therefore sets out a framework designed to help companies better align their corporate culture with their strategic direction, through conducting analysis, monitoring progress and improving reporting of this material issue over time.

Read the letter Cyrus sent to board directors here, along with our stewardship guidance.



Footnotes

1Jonathan Haskel and Stian Westlake, Capitalism Without Capital : The Risk of the Intangible Economy, (Princeton University Press, 2017).

Disclosures

The views expressed in this material are the views of Cyrus Taraporevala through the period ended 01/28/2019 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

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