The Board’s Role in Culture
Every organization has a culture. Its leaders shape culture by their decisions and actions. Whether by design or disaster, the c-Suite and Board define the real culture irrespective of what exists on paper.
Play an active role in shaping culture.
In all organizations, the buck stops with the Board. The Board is also accountable for results – both financial performance and the decisions and actions engendered by organizational culture. Immediately upon the Board’s selection of CEO, the Board shapes culture – intentionally or not. Rather than passively accepting or reinforcing culture, I advise Board members to play an active role in shaping culture..
If the buck stops with the Board, then it should also start there.
Three things Boards do to shape culture:
1) Put culture on the agenda.
Literally. Guide definition and development of the desired culture. Ideally, obtain an unbiased, outside view of what the culture really is. Include key elements of culture on the Strategic Dashboard© used by management and the Board to monitor progress in advancing strategic priorities. This elevates the culture conversation to its rightful place as a key driver of results.
2) Be the culture you expect and need.
Align Board actions with expected cultural norms for the rest of the organization. This includes how you work, the types of candidates the Board attracts (and accepts), and what happens when Directors or management fail to honor expected cultural norms. Routinely evaluate how well the Board is living and breathing the expected culture.
3) Share responsibility – without abdicating accountability.
Management shares responsibility for nurturing the desired culture and building the internal infrastructure to support it. Good governance requires the Board to be accountable for the culture and its impact on performance. For example, in its oversight capacity, the Board supports whistleblowers. Give internal and external stakeholders a clear process to raise issues and be heard, safely. And of course, the Board must remain sufficiently out of the weeds as to maintain its independence.
Culture is everywhere and the stakes for solving the culture puzzle seem to be rising. Culture starts with the actions of its leaders. In the Board’s case, this extends beyond simply selecting and installing a CEO. In fact, the role of the Board gives it an advantage in defining, nurturing, and monitoring the culture that’s needed to achieve the company’s objectives.
For more on culture and the Board, read here. Learn more about solving the culture puzzle with the "Elements of Culture©" tool (p. 189) in my book, Charting the Course: CEO Tools to Align Strategy and Operations. For more about the “Strategic Dashboard©” tool, see p. 107.