Culture is the Responsibility of the Board

Wednesday, April 17, 2019

Corporate culture should be on the radar of every organisation, and it is fast becoming the role of the board to get deeply involved in it. Corporate culture is much more than compliance, rules, processes and procedures. It is very core of the organisation, and what it really is.

A recent article by Peter Montagnon for Strategy+Business online magazine (read it here) convincingly argues that boards can no longer watch from the sidelines, but has to get involved in their organisations culture. Montagnon highlights two actions to do this, which involves analysing data they have previously downplayed or ignored. The two actions are:

  1. Understanding and shaping the forces that drive Behaviour with the organisation

This entails finding a way to score corporate culture, which may mean suing a variety of indicators to build an overall picture. Because there could be so much data to sift through, boards need to utilize a dash-board approach and to cross-references anything that may have a story to tell. Whatever indicators a board chooses, they need to be forward-looking.

  1. Being aware of the organisations social footprint

It is difficult, but boards need to understand the views of employees and other key stakeholders. Balancing the need to not micromanage, boards should be informing themselves to the point they are satisfied the company has a comfortable relationship with key stakeholders. This may well involve firsthand contact of board members, and data from opinion surveys.

The challenge for boards is to decide which stakeholder’s matter, what indicators of Behaviour to monitor, and to ensure the right information flows up to them from the appropriate sources. But before any of this can happen, the board must be very clear on what their values are and what their company is there for in order to determining what behaviours are most important and how the organisation should relate to stakeholders.

Doing this will see employees having a sense of purpose that goes way beyond just making money. Instilling this sense of purpose is the task of governance.

Avondale Business School (ABS) can help you with your governance and board practices. To find out how just contact Dr Warrick Long on [email protected] or 02 4980 2168.