Board directors – do you have five minutes? Take a look at your latest board papers and meeting agenda. How much time and space was devoted to your corporate culture?
For most, the answer will be zero or a tiny percentage.
Board packs are teeming with financial information, performance indicators and the latest updates on customers and stakeholders. Annual reports are too. Culture barely gets a look-in.
And yet we know (and numerous studies back this up) that organisational performance is driven by culture – the shared values, beliefs and behaviours that guide how people get things done in your organisation.
Why corporate culture should matter to boards
To see what happens when boards take their eyes off company culture, we only have to look to high profile culture case studies such as Cricket Australia’s ‘winning’ culture incident in Cape Town (2018), the financial services industry ‘greed’ culture stories that were exposed through the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2019), and more recently the ‘lack of accountability’ culture experiences shared in the Royal Commission into Aged Care Quality and Safety (2021).
As directors of organisations, accountability for culture rests with us.
We need to know what’s happening inside our organisations. And, given our often limited exposure to the people doing the day-to-day work, if we don’t take a lead on culture, we are relying on chief executives and senior leaders to tell us how it is.
Putting culture on the board agenda
We need to treat our cultural responsibilities in the same way we treat our financial and governance responsibilities.
That means understanding what culture is and the culture we want in our organisations. It means holding ourselves and our executive teams accountable for exemplifying that culture through shared values, beliefs and behaviours – values, beliefs and behaviours that everyone in the organisation knows and understands. It means using our values to help us make the tough calls and navigate the grey. It means asking questions, listening for cultural cues and digging deeper. It also means putting culture on the board agenda, including cultural KPIs in your CEO’s performance scorecard, independently assessing your organisation’s culture, setting policy based on values, and gathering data points that help paint a cultural picture for the board.
In the same way the board provides independent oversight of organisational strategy, risk and finances, we need to be oversighting culture.
Last year, the Australian Council of Superannuation Investors and the Australian Institute of Company Directors published Governing Corporate Culture – Insights from Australian directors to give some practical guidance to boards. It’s a great place to start.
Author: Liz Kearins is Principal Consultant at Actrua, an award-winning Australian consultancy specialising in performance culture, leadership development and safety culture. Liz has many years in executive roles leading cross-functional teams, and also recognises the emerging role of boards in ensuring that organisational culture delivers on strategy. Connect with Liz on LinkedIn.