CHANGES IN LAW AND CORPORATE CULTURE

Changes in Law and Corporate Culture

Changes in Law and Corporate Culture

Introduction

For about decades, laws are written and are in place, but their role in changing corporate culture is dramatic. Laws are enforced to ensure that corporations operate in a legal and safe manner. This refers that everyone receives similar advantages, rights and opportunities within the organisation, regardless of gender, age, race, religion and so on. Corporations across the world countries spend substantial amount of money and time to comply with laws. Since, non-compliance with laws might result in devastating consequences, such as lawsuits and penalties. Still, behavioural changes remains subtle, and non-compliance remain widespread.

There are several laws are already in effect to govern corporate behaviour and culture; however, the recent changes in these laws are noteworthy. The aim of this paper is to addresses recent changes in three prominent laws of UK that are Company Act 2006, Bribery Act 2010, and Corporate Manslaughter and Corporate Homicide Act 2007. Then, the paper examines the behavioural aspect of governance in relation to these laws, as well as impact of these laws on corporate culture.

Recent Changes in Law

In United Kingdom, law are constantly changing to meet the rapid changing needs and demands of the society. Nowadays, corporate world is operating in highly competitive market environment, which at times forced the businesses to get engaged in illegitimate activities that are undeniably not permissible as it might ruin the corporate culture by communicating the wrong message that there is no harm to get involve in unlawful acts to gain profitability or benefit. Here, the role of lawmakers becomes more important. In UK, recently laws are amended to address the new issues prevailing in the corporations. Some of them are discussed below:

Company Act 2006

One of the widespread challenges faced by corporation includes workplace diversity. It is often witnessed that most of the organisations failed to deal with this challenge. This is not a new issue and differences between people working in an organisation are being long recognised. Moreover, there are several laws already in place to protect workplace diversity, such as Equality Act 2006, Employment Equality Regulations 2008, Race Relations Act 1976 and others.

However, there is a slight amendment has been witnessed in the Company Act during 2006, which necessitated UK listed companies to include overall gender profile of the company in their annual report. In this report, corporations need to include gender profiles of employees based on their sex, and breakdowns must include different levels of organisational hierarchy, such as how many women or men are employed at senior managerial level and at directorship cadre (Ruggie, 2008, pp.190-212).

This amendment drastically increased the participation of women in the boardroom, and promoted principles of women empowerment. This recent change ensures equality, which refers that corporations involve women and men equally in the decision of corporate governance and other significant decisions. Moreover, this change evades the chances of discrimination within the workplace based on gender and sex by offering ...