The UK Financial Reporting Council (FRC) organised a conference on Tuesday 20 September entitled Culture to Capital: Aligning Corporate Behaviour with Long Term Performance.

The discussions covered a very abstract and slippery topic: defining and shaping the right corporate culture, which is equivalent to asking how many angels can dance on the head of a spin.

On many occasions speakers referred to the iconic Cadbury report on corporate governance, but overall there were many instances where a bit of historical memory was missing.

The first memory issue came from Conor Kehoe, senior partner at McKinsey who, although delivering an insightful presentation, said that one of the greatest inventions in human history was “the Company” of the Victorian era.

Kehoe praised the effort involved in putting together capital and the sense of collective enterprise for the benefit of society. However it was Charles Dicken’s account of the exploitation of workers (children included) in Victorian companies that coined the adjective Dickensian to describe poor working conditions.

Had he praised Karl Marx, who by that time was familiar with the City, he would have been closer to Theresa May as the UK Prime Minister is suggesting making boardrooms more inclusive by giving a voice to workers’ representatives.

I’d also dare to say that companies existed before, take the sort of private finance initiatives that funded the re-discovery and then colonization of America by the Spanish Empire. But again, being a prominent example of genocide of the West Indies natives, as documented by historian Bartolomé de las Casas, it wouldn’t be a good reference for an event discussing corporate culture.

One of the speakers, BAE systems chairman Sir Roger Carr, resorted, if I recall correctly, to perhaps the emptiest cliché of all in the corporate culture lingo repertoire: the right thing to do is to do the right thing.

That’s another instance of memory lapse, but this objection is personal: I don’t accept any hint of righteousness from someone whose core business is to broker arms trade deals. I simply, out of principle, don’t.

Summarising the presentation of all the speakers, Philippa Foster Back, director of the Institute of Business Ethics (IBE), detected another instance of memory lapse: “I was actually half expecting tax to appear as well but it hasn't been talked too much this morning.”

Foster Back then remembered that in the very same venue where the FRC event was held, Mansion House Place, a group of foresighted business people, including Sir Adrian Cadbury, created the IBE 30 years ago in the aftermath of the so-called Bing Bang

“[The IBE] was launched specifically with the view to help companies and organisations create the right cultures to prosper,” she said.

The Big Bang (or the deregulation of financial markets in the eighties during the Thatcher era) can be seen as the prologue of Gordon Brown’s light touch regulation which preceded the financial crash of 2008.

Many commentators have argued that the contempt for regulation (let alone the pervasive culture of greed) was a key contributing factor of the financial crisis, after decades of leaving financial regulatory structures toothless and companies’ internal controls anaemic.

In a video tape of Lehman Brothers UK, perhaps shot not far from Mansion House, Dick Fuld, CEO of the failed USA bank seemed angry because some short sellers were affecting Lehman’s stock price.

“I want to reach in, rip out their heart and eat it before they die,” Fuld told an internal audience in 2007.

This quote epitomises the corporate culture of the time, the fruits of a lack of regulation as portrayed in the documentary Meltdown: The Secret History of the Global Financial Collapse.

In the documentary, former Canadian finance minister Paul Martin says deregulation came about due to the competition between New York and London to become the financial capital of the world. 

"The race to become number one was very important. But how do you attract the financial industry? Well, the most logical way is what they call regulatory arbitrage which simply says ‘Let's gut the regulatory system and therefore more people will come’," Martin says in the documentary.

In Meltdown features also Geraint Anderson a former City trader who by 2004 was making a salary of $300,000 a year plus an annual bonus of $700,000. 

Anderson says in Meltdown: "The whole game is increasing your bonus. You don't go into the City to do the world some good. You go there to make money as quickly as possible. If that means lying, cheating and stealing, that's what you do.” 

Anderson continues: "Regulators and politicians are just deemed to be idiots. And that of course was exactly what Gordon Brown was encouraging as Chancellor of the Exchequer and interestingly he calls my precise period in the City the age of irresponsibility.

“To me it's just obvious; the way people were behaving was a rational way of behaving in the context of the bonus system and the lack of regulation."

It was worrying to acknowledge that some of the panellist showed certain allergy to regulation, when the topic emerged in the discussion. Elizabeth Fernando, head of equities at USS, said that one of her colleagues likes to say that there are no problems that government intervention can't make worse.

Even more worrying was the laughter this mockery of government intervention and regulation erupted from the audience. 

Well, government intervention, or better the lack of it, seems to be what was missing for spotting in time the USA subprime mortgage cancer that spread across the world.

Debating for a day about corporate culture is all well and good but it cannot replace the tough and resolute regulatory action expected from regulators, including the FRC. 

As custodians of the UK Corporate Governance Code, as Sir Win Bischoff said at the opening of the event, the FRC owes this not only to investors but to the general public.