Culture Initiates at the Top

Organisational culture does not get created on its own, it is created over time by the leadership. The term tone at the top refers to how leadership influences the company’s ethics and value system. When those in leadership positions act with integrity, engage in open communication, maintain accountability, and practise fairness, this mindset permeates within the organisation. It fosters a workplace where individuals feel aligned, trusted, and inspired to act ethically.

“Tone at the top” was a term that originated in the field of accounting. It was used to describe an organization’s general climate, as established by its board of directors, audit committee, and senior management. The concept received more attention with scandals such as Enron and WorldCom, which showed how bad things could go when leadership sets the wrong example and does not lead properly.

Why Tone at the Top Matters

When the board and senior leadership team lead with integrity, it sets the tone for how everyone else behaves. People watch what leadership does, more than what they say, and if the example from the top is right, it encourages ethical choices across the company. However, if that example is weak or inconsistent, it can lead to real problems. It is not uncommon to see poor behaviour at lower levels being traced right back to gaps in leadership conduct.

Every decision or a message from the top sends a signal about what is expected and acceptable, and what will not be tolerated. The real goal is to build an environment where doing the right thing is not an exception, but the norm. This comes from leaders who treat people fairly, hold themselves accountable, and make values a part of everyday actions, not just words on a wall.

What Good Leadership does

When the tone at the top is strong, it does not stop with the boardroom, but spreads throughout the organisation.

Board of Directors: They lay the foundation. By walking the talk, the Board leads by example. Hiring leaders who reflect the company’s values, and keeping ethics on the agenda, helps build the right culture.

Key Managerial Personnel/ Senior Management Personnel: They set the pace and keep the culture alive through their actions. They appreciate the right behaviour, and disincentivise what is not correct.

Tone at the top is less about grand gestures, and more about steady, consistent leadership that makes values part of the everyday experience. That is how a good culture is built and lasts.

Good Practices That Set the Right Tone

• Frequent and honest communication from leadership, especially when things go wrong.
• Creating safe channels for feedback and whistleblowing, and acting on concerns.
• Board leadership which is credible and sets the right tone.
• Code of conduct that states and promotes what the organisation stands for.

Consistency is the key. With leaders who walk the talk, a company would have the right tone at the top.

Pallavi Tripathi