In her first year of work after graduating from University, my daughter experienced an aggressive corporate culture that was based on harassment and bullying. At that time, she still lived at home so each night at the dinner table we would hear about her horrible work day and we could see how it was affecting her confidence, her self-esteem and her mental health. Fortunately, my husband and I were able to coach her on how to survive this work environment until she was able to find new employment. We guided her to take this situation as a learning opportunity (what not to do) for a time in the future when she would be a leader of people.
My daughter left that company to join one that had a constructive culture that encouraged employees to question, learn, collaborate and innovate.
The question that I had throughout her ordeal was, “Where was the Board of Directors in all of this?” “What is their responsibility when it comes to corporate culture?”
Organizational culture is determined by many things, the most powerful of which is leadership. The Board, who is responsible for the hiring and evaluation of the CEO, are therefore the ultimate leaders of the organization and as such play a key role in setting the tone and overseeing the corporate culture.
Organizational culture is a powerful thing as it touches every aspect of a company. It can be defined as the shared values, norms and expectations that determine the way employees believe they need to behave. Said another way – organizational culture is what it takes to “fit in”.
So why should the Board care about the organizational culture of the company? Well for starters, culture plays an important role in strategy execution, profitability, innovation, risk management, customer service, employee engagement and long-term viability.
Boards of Directors are the team-at-the-top and how they behave in the boardroom and on committees, how they make decisions, how they communicate with management and what they reward set a real tone for the company. As part of their governance oversight, Board members need to ask questions about the corporate culture and assure themselves that they;
a.) have the corporate culture required to deliver on the strategic direction;
b.) look beyond employee engagement and question what behaviours are being recognized and rewarded;
c.) annually review the harassment and whistle blower policies.
Most importantly, the Board needs to communicate its commitment to a safe and constructive culture and then walk the talk!
Culture is not something that is “airy fairy”. It can be observed, measured, defined and changed. As a governance advocate and an executive coach certified to audit corporate culture, I can help you define the culture you have, provide your Board and management team with common culture language and help you develop a clear direction for change.