The Board’s Role in Corporate Culture

Establishing and driving company culture is not only the responsibility of the Executive Management Team. Boards must play an active role in defining the culture, together with the Executive Management team. They must also lead by example to live up to the key pillars of the desired corporate culture.

A company’s culture can be geared towards a high performing culture, if the Board is actively involved in the development of the mission, vision, and strategy. They must establish the appropriate values, systems, and structures, create the right level of involvement of employees, and foster the external adaptability to the market environment by ensuring focus on customer orientation and change management.

Is your board driven by outcomes or inputs?

Many Boards these days consider their focus on financial metrics, approval of the strategy. and risk management as their key responsibility. In other words, they put more emphasis on the outcome rather than on the input. The input is largely driven by the human factor in an organisation, i.e. the people, the way they work together, the values they embrace, and the processes that help employees to interact in an efficient and effective way.

So, how can a Board be actively involved without interfering with the responsibilities of the Executive Management team and without becoming too operational? Which kind of processes have you established in your Corporate Board to find the right balance between involvement and empowerment? It indeed starts with simple process definition within the Board and with a clear definition of the Boards role, agenda topics, and focus areas. These must go beyond getting reports on financial results, business cases for key strategic projects, or investments and risk management.

Boards must define core processes.

How often have you, as a Board, defined core processes, values and people as a key agenda topic? Most Boards probably have this on their agenda once a year when they discuss succession planning. There are Boards, however, who have these three issues as a standard item on the agenda of every single Board meeting, together with customer orientation, innovation, and change management.

So, bear in mind, at the core of all is the human factor. It’s people who form the strategy and deliver against it as much as culture is the people part of strategy. Focusing on corporate culture, with the key dimensions mentioned above, and putting people at the core, drives a high performing culture. This must be a key responsibility of the Board.