What are company values?

What are company values?

Company values are a non-financial descriptor of a business. They encompass the style and principles with which a company conducts itself. Establishing and communicating clear company values is becoming increasingly important and for many professional and financial services businesses, a key method of differentiation.

Generally, businesses are waking up to this and the public perception of the ‘value’ of company values seems to be changing. They are now being given attention and credence at multiple levels of an organisation, including at the very top.

This is a welcome change, given that the Financial Reporting Council’s 2018 guidance on board effectiveness highlighted the role of values in the long-term success of a company’s board. Currently 80% of Fortune 100 companies publicly tout their values.

Values influence a company inside and out. Internally, they champion desirable culture and behaviour. Externally, clear values articulate to the stakeholders exactly what the company is, who it wants to be and how it behaves.

Referencing the company values in the annual report is a key tool in embedding values. Financial measurements, while clearly important, fail to get the heart of the company’s identity. Values give an indication of how the company will act going forward, especially in unforeseen circumstances.

Values, done well, are a huge asset to a firm. In just a few short words or phrases, they have the ability to divulge the intricacies of a company to the stakeholders, clients and potential clients – tying together the history, behaviours, and legacy of a business.

A good example of a company that has properly embedded values into its business is Hitachi, whose values are, – Wa, Makoto, and Kaitakusha-seishin, or in English –

Harmony, Sincerity, and Pioneering Spirit.

These values are a nod to the business’s Japanese culture.

Hitachi uses its values to form the basis of internal company awards. Additionally, methods to enhance the values are put forward in the latest annual report. This distinctive set of values serves to link the different branches of this international corporation, creating one identity worldwide.

Communicating values to the public is a fine art, one that many companies get wrong (especially in the financial and professional services industry). In a study of 50 US banks, 34 of them publicised the same value – ‘Integrity’. Similarly, in a broader study of large businesses, 53% touted ‘collaboration’. This generic approach to values fails to truly represent what makes that company unique.

Another common mistake is the use of linguistic devices to format values. For example, many companies choose values where the first letters combine to create a word. Others use alliteration as a device, choosing values that all start with the same letter.

The issue with this approach is that it creates a barrier for companies to properly reflect who they are. It pushes an organisation to fit a value into its company culture that simply does not suit. In other words, square peg – round hole.

Values offer a unique approach to communicating with stakeholders. Financial measurements fail to tell the whole story of business. It is values, properly developed and articulated, that can provide the context that creates long-term stability and identity. Businesses that do not embrace values risk losing their voice in the noise of a busy market.


Contact MSP Reach for more 

1920 1280 Oliver Jones
Privacy Preferences

When you visit our website, it may store information through your browser from specific services, usually in the form of cookies. Here you can change your Privacy preferences. It is worth noting that blocking some types of cookies may impact your experience on our website and the services we are able to offer.

Our website uses cookies, mainly from 3rd party services. Define your Privacy Preferences and/or agree to our use of cookies.