Diligent Institute's "What bucks stop with the board around corporate culture?" shares perspectives from a number of seasoned, global directors on the board's role in corporate culture. Their thoughtful insights can assist other companies in developing a board oversight framework or metrics for management's reporting to the board on a topic that can otherwise be difficult to translate into tangible action items.
Suggested considerations include:
- Ensuring a proper tone at the top, including - if necessary - removal of the CEO and other top executives
- Directors need to walk the talk, lead by example (e.g., align board travel policy with senior management's)
- Employee engagement surveys - including reviewing themes among the unfavorable responses, even if they constitute a minority of the total
- Hotline stats, e.g., how many people are calling, and about what?
- Employee turnover
- Exit interviews
- Websites like Glassdoor
- On-site/field visits - observations and talking with employees
This input from Donna Wells, currently a director of Betterment, Happy Money, and Mitek Systems, and former director, President & CEO of Mindflash, and former director of Boston Private, is particularly shareworthy:
I'll admit that I felt differently when I was a CEO and holding my first Independent Director roles. But I now believe that corporate culture is absolutely the responsibility of the board for two key reasons: First, on average, board members serve the company's shareholders longer than the CEO does. This is particularly true in my industry, technology. So, board service represents an opportunity for continuity in corporate culture over a longer term. And culture is more than a 5-year project. Second, culture is how Strategy happens. One of the board's two key outputs is the Strategic Plan. The Strategic Plan becomes reality only when front line employees make their dozens of daily decisions in alignment with that strategy. And every one of those decisions is governed by their understanding of the company culture: what is valued, what is rewarded, what is celebrated. So, any Board that wants to see its Strategic Plan move from PowerPoint to P&L will focus on company culture … definition, development and continuity.