In the media, the c-suite, and the boardroom: culture is everywhere. Prevailing challenges to counter a revolving door of talent, design the workforce of the future, and incorporate what's been learned even as you move forward, naturally and repeatedly recall culture to the top of executive agendas.
Research has long affirmed the causal relationship between organizational culture and company performance. (For example, read here.) Since long-term corporate health and performance is at the heart of the Board’s charge, it makes sense for Boards to take an interest in company culture.
Too often, however, the Board’s role in influencing culture is confined to the realms of compliance, ethics, and investment. While certainly these are important areas and relevant for boards, the Board’s role in shaping culture goes beyond that. In fact, the Board shapes culture immediately upon its selection of CEO. Thereafter, its actions signal what is expected and tolerated from management – and thus, the entire organization.
The buck stops with the Board.
Rather than passively accepting or reinforcing culture, I advise Board members to play a more active role in shaping culture. Why? Culture starts with the actions of its leaders, including the Board. The Board is also accountable for results – both financial performance and the decisions and actions engendered by organizational culture.
If the buck stops with the Board, then it should also start there.
The Board has an advantage.
With an average tenure of about 10 years, Board members often outlast the c-suite, whose tenure has averaged roughly half that time. This means Board members can influence the direction and tenor of the organization for a longer term than most CEOs. Independent (non-management) directors also bring perspective. They hear from stakeholders and can experience the culture without getting bogged down in it. Having both time and independence, the Board has an advantage. Exploiting this advantage – by playing a more active role in shaping culture – can impact corporate health and the sustainability of the organization.
Culture should not be an amorphous blob.
Every organization has a culture. And it can be hard to describe. It's that "Je ne sais quoi." Yet, culture should not be an amorphous blob.
Leverage the perspective, experience, and mandate of your board to shape your culture. Use them to rid the organization of the amorphous blob. The Board's tenure and line of sight create a bridge between the organization's origin story and its image - past, present, and future. Independent directors are particularly well-positioned to assess the extent to which leaders are living the culture and identify what needs to change for the future to be different.
Itself a strategic imperative, culture requires deliberate action and attention. Otherwise, leaders risk having a culture that does not support its future ambitions. Culture starts with the actions of its leaders, including the Board. To solve the culture puzzle, then, involve your board. Your board can - and should - help to ensure the culture you have is the one you need.
For tips to assess and discern the culture you need, see here and here. Learn more about solving the culture puzzle using the "Elements of Culture Roadmap©" (p. 190) in my book, Charting the Course: CEO Tools to Align Strategy and Operations.