Why Employee Engagement Surveys and Formal Policies Fail to Reveal True Workplace Culture

Management teams often point to engagement scores and formal policies as evidence of a strong workplace culture.

But how can an investor know if that is actually true?

Employee engagement survey results are frequently cited.

But what were the questions?

What was the breakdown by function, geography, or manager?

And how safe did employees actually feel answering honestly?

The meme of “Helen, you’re the last one who hasn’t completed the anonymous survey” exists for a reason.

This matters because even widely relied-upon workforce survey data shows that a much smaller share of workers report being engaged than many corporate narratives imply. Gallup’s State of the Global Workplace finds that only roughly 21% of employees globally describe themselves as engaged.

Beyond surveys, investors often infer cultural strength from the existence of formal policies, HR systems, and internal reporting channels.

But the existence of policies alone is a weak signal — it tells investors little about how issues are actually handled when they arise.

In practice, the most problematic behaviour is often resolved quietly — through exits, severance, and silence.

While this can remove genuinely toxic behaviour, it can also result in the employee who experienced discrimination or harassment being paid to leave.

Either way, the underlying issues are often removed from view, preventing both investors and companies from identifying and addressing them.

There is no perfect fix. Even well-run companies will likely have toxic environments somewhere. The question is whether governance systems surface those issues early — or manage them quietly until value is impaired.

This is where culture, governance, and investor accountability intersect — and where the limits of passive reliance on disclosure become most visible.

The starting point is being honest about what our data can — and cannot — tell us, and resisting the temptation to treat policies and aggregate scores as evidence of strong human capital management practices.

Second part in a multi-part series on human capital, governance systems, and decision-useful information for investors.

Next post: what investors can do when workforce data and internal systems have inherent limits.

For those interested in the underlying employee engagement data:

Gallup — State of the Global Workplace

The most recent report shows that only ~21% of employees globally report being engaged at work, despite the widespread use of engagement surveys and formal workforce policies.

https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx