Culture recap – Key takeaways from governance reviews in 2024

The year 2024 saw the resurgence of culture as a key governance issue amidst front page headlines.

In this article we look at key takeaways from various governance reviews into culture last year and areas of focus for boards in 2025. ASIC Chair Joe Longo recently highlighted that poor CEO behaviour can also signal deeper issues about company culture.

Key takeaways

1.     Board oversight of organisational culture and subcultures

A common theme across multiple governance reviews was the challenge in providing effective oversight of organisational culture, particularly where culture may not be consistent or uniform across all divisions, teams and geographic locations.

For example, the Qantas governance review highlighted a “command and control” leadership style with centralised decisions and an “experienced and dominant CEO”, which impacted the willingness to challenge management. The board had limited visibility of this dynamic and extrapolated the strong “safety culture” to represent the broader organisational culture. See here for further insights on the Qantas governance review.

The culture review at Nine Entertainment found that Broadcast Division respondents – largest division covering a third of employees – had experienced higher rates of abuse of power or authority experienced bullying, discrimination or harassment, and sexual harassment, when compared to the overall figures.

The Australian Broadcasting Corporation (ABC) review reported that staff had experienced widespread racism in the workplace. The review highlighted that despite the ‘good intentions’ of the senior leadership team to address issues of racism, there were concerns this did not cascade down the organisation at a day-to-day level, especially middle management.  

The 2024 progress review of the Rio Tinto Everyday Respect Report found 39 per cent of survey respondents had experienced bullying in the past year (compared to 31 per cent in 2021), whilst 40 per cent of respondents witnessed bullying, sexual harassment or racism. Rio Tinto acknowledged the resistance to initiatives to improve diversity, equity and inclusion “may be contributing to a rise in harmful behaviours”.

2.     Board leadership – Acknowledgements & accountability

Boards and senior executives need to set the tone at the top to ensure credibility, commitment and consistency with the organisation’s desired culture and values. Recent experience shows that boards and senior leadership teams will ultimately be judged by stakeholders such as investors and regulators on the actions to address the underlying issues.

For example, the reviews at Nine Entertainment and ABC were publicly released by their organisation’s Chair and Managing Director, with apologies to staff. Nine Entertainment advised staff it was conducting formal investigations into various complaints raised, with proportionate action to be taken depending on the wrongdoing.

Sustained media reporting ensured board culture, compliance and conduct issues remained top of mind for directors in 2024. For example, large industry superannuation funds stepped up their public and behind the scenes engagement with companies following continued media coverage involving founder CEOs.

• The Mineral Resources board imposed financial penalties of $8.8 million and losses of up to $9.6 million in remuneration on the Managing Director/Founder, Chris Ellison, given the significant governance and reputational issues that arose. It also fast-tracked a succession plan to see the chair and managing director depart in the following 12-18 months. This review followed engagement with investors and other stakeholders.
• The WiseTech Global board agreed to a request from CEO/Executive Director and Founder Richard White that he would step down and transition into a new full-time, long term consulting role. The board also engaged external legal counsel to investigate claims raised in media coverage including workplace behaviours and allegations of repeated bullying, harassment and intimidation, which cleared him of misconduct.

These examples highlight the importance of CEO-succession planning, especially for boards to have discussions about successors in the case of founder-CEOs with deep involvement in the company. At the same time, founder-CEOs can have the strong backing of investors despite reputational issues, which is evident in these examples with mixed shareholder views on the appropriate course of action for the board.

3.     Review and renew governance structures and systems

The various reviews prompted boards to consider opportunities to refresh governance structures and systems to provide greater oversight of organisational culture – from establishing new board committees or updating charters, to risk management matrixes and reporting KPIs.

Examples include:

• Mineral Resources – Establishment of an independent Ethics & Governance Committee to oversee compliance efforts, covering related party transactions, whistleblower reports and ethical breaches and conflict of interest procedures.
• Qantas – Amendment of the Remuneration Committee Charter to cover key people and culture oversight. This includes addressing strategic workforce planning and organisational design.
• Nine Entertainment – Development of a Respect@Work Risk Management Matrix that maps the organisation’s inappropriate workplace behaviour risks against risk mitigation and management strategies. This includes a regular board review which should consider key data points (e.g. complaints, turnover rates, workers compensation claims and payments and exit interviews feedback etc).
• Rio Tinto – Quarterly board reporting to monitor implementing cultural reforms, including KPIs such as the average time to resolve reported incidents and investigations, the number of people who remained/departed after raising a report and a summary of consequences for substantiated harmful behaviours.

Reflections for 2025

The various culture reviews of 2024 provide important reflections for boards in 2025.

• Set the tone at the top and ensure senior leadership actions align with the organisation’s desired culture and values, especially around transparency and accountability. CEO conduct will be closely scrutinised by internal and external stakeholders.
• Provide rigorous oversight of culture through board committees and on the ground engagement, including addressing poor sub-cultures that may develop across the organisation at different levels, divisions and locations.
• Review governance structures and frameworks to ensure they remain fit-for-purpose with regard to clarity of roles and responsibilities, risk reporting and mitigation and monitoring of key metrics – leading and lagging, quantitative and qualitative.
• Identify where prevailing policies or cultural traits may create negative impacts on particular segments of the workforce.