Investors should look at employee feedback, staff turnover, concerns raised and operating problems together, then ask what needs explaining. None of those measures proves that a company has a healthy culture or an integrity problem. Their value is in directing follow-up before the board is left responding to a crisis.
In the Fund Shack conversation, Rupert discusses the information a chief investment officer could use across a portfolio: turnover, speak-up data, absenteeism, losses and delays. His recent Integrity Gap article on culture and stewardship also asks whether the employee data investors receive is useful and honestly recorded.
The next step is to turn that information into a review process. What should prompt a question, who should answer it and how will the investor know whether anything changed?
Start with the business and the decision
Choose measures that relate to how each company operates. For a business dependent on specialist staff, ask about departures and whether work can still be delivered. For a supply-chain business, ask about delays, losses and the explanations given for them.
Avoid prescribing a large common dashboard before deciding what it is meant to reveal. A small set of measures with clear definitions and someone responsible for follow-up is a better starting point.
For every proposed measure, ask: if this changed materially, what would we do differently? If nobody can answer, reconsider why it belongs in the board pack.
Check how the numbers are produced
Ask who records the information, what gets left out and whether definitions have changed. Does a concern raised informally count? Does a departure appear differently if it is labelled voluntary? Are contractor problems included in the operating data?
Where exit interviews are used, establish whether they happened and whether people could speak candidly. Where surveys are used, look at the actual questions and who responded. A summary score cannot tell you whether respondents understood the questions or felt able to answer them.
Use aggregated reporting for portfolio oversight. Keep identifiable complaints and sensitive personal information within the authorised handling process, rather than circulating them in a general comparison pack.
Read changes together and ask for context
Treat an unusual movement as a reason to enquire, not a finding.
For example, if departures and delivery delays rise together, ask whether they concern the same part of the business. Check whether a reorganisation, workload change or recording change explains the pattern. Do not assume misconduct because two lines on a chart move together.
Ask management to explain both the operating issue and the response. What have they checked? Whose account have they heard? What remains uncertain?
The investor’s role is to test the explanation and agree the next action, rather than diagnose people’s motives from a dashboard.
Do not reward silence
Few recorded complaints should prompt a question about access and confidence, as well as about conduct. More reports should prompt questions about their nature, how they are handled and whether the reporting route has changed.
Ask whether people can raise concerns outside line management and whether they receive a response. Check how overdue matters and repeated themes reach the board.
Avoid giving management a target simply to reduce the number of concerns. That would make the number the objective, when the real task is to understand and address the underlying problem.
Compare companies without inventing a league table
Before comparing portfolio companies, check that the measures mean the same thing. Workforce size, operating model and reporting arrangements belong alongside the figures.
A useful common reporting structure asks each company to explain significant changes, gaps in the data, actions taken and matters requiring investor attention. It need not impose the same threshold on every business.
This differs from the first-100-days integrity review. That establishes the operating priorities after investment. Ongoing monitoring asks whether those priorities, and management’s account of them, still hold.
Close the loop at the next review
For each concern that merits follow-up, agree who will check it, what evidence is needed and when it will return for review. If the explanation remains weak or the action stalls, decide whether a deeper review is warranted.
Keep the original question visible until it has been answered. Adding another chart does not resolve an unexplained pattern.
The test of portfolio culture reporting is whether it produces a useful conversation and a proportionate action. Start with a few measures you can understand, challenge and act on, then expand only where there is a clear reason.