Culture and governance

With ultimate accountability for ensuring the prosperity of an organisation, boards are increasingly being held to account for organisational culture and more specifically misbehaviour – achieving organisational success by being proactive and operating with integrity.

Culture has many definitions, at its most simplistic, workplace culture is about the character and personality of your organisation, or, how things are done around here. It’s not just how people interact with one another, culture goes deeper.

Culture can manifest itself in many ways, and in an ideal world, it should align with your organisational strategy. For example, if health and safety is an organisational priority then chances are, safety is the first topic on the agenda for a board or leadership team meeting. If employee wellbeing is a core value, then its likely that you’ll offer a flexible working environmental to attract and retain the right people.

Typically, those at the top of an organisation are of the belief that culture is about other people’s behaviour when in fact, its more about how you act as a leader. Recent events that have hit the headlines, mostly related to misbehaviour, are putting the spotlight on culture and expectations for boards to respond.

Not addressing systematic issues with culture in your organisation can have severe consequences, both financially and reputationally. Long term, what will be the impact on your organisation if your wider community have negative impressions of your business, how will you attract new staff to deliver on your strategic intent, how will your stakeholders react and how does this impact on your social licence to operate?

Here are some tips on how a board can steer the culture of an organisation.

The most fundamental responsibility of a board is the appointment of a CEO to lead an organisation and emulate the culture of the business. A CEO is responsible for communicating the strategic vision of an organisation in a way that engages all stakeholders, including employees. Putting the right person in the role at the right time, who then does the same with the senior leadership team, is a key predictor of organisational success.

Give culture careful and purposeful attention by including it as a standard item on your board agenda. As Peter Drucker famously said, “what is not measured is not managed”. Does the organisation’s mission, values and business model align with its desired culture? How can you accurately measure culture in your organisation with meaningful metrics that are regularly updated and discussed? What are the perspectives of employees, other than the senior leadership team?

Tracking more specific compliance and employee data can help uncover issues in terms of misbehaviour, for example, what are employee satisfaction statistics, do you have an effective whistle-blower policy? Is your remuneration committee utilising best practice standards to determine remuneration packages? Are diversity and inclusion policies, well thought out and implemented?

The key takeout is that building culture starts at the top. As a board, ask questions of your senior leadership team and become attuned to the culture within the wider organisation – not just round the boardroom table. Overseeing culture is continuous; acting quickly is imperative.

If you are looking for support to align the culture of your organisation with broader strategic intent, get in touch with us.

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