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How to influence board culture - Coggle Diagram
How to influence board culture
Bearing in mind that the broader system may have a larger impact, how can a board most influence the impact that it does have - based on the definition of culture, that a culture is mostly comprised of the unconscious and thus invisible values and beliefs held by individuals and the board as a whole, this is perhaps the wrong question
We cannot focus on influencing a culture directly as we can only experience instead the visible behaviours that emerge at the tip of a cultural iceberg
We can inquire into which core values and assumption have created these behaviours, to do this, we need to facilitate space for the board to reflect on how they have previously behaved and thus of what culture this is indicative
You cannot simply roll out a culture, it just exists as a function of the shared values, beliefs and assumptions within a particular grouping. What one can do is become more aware of where, externally from the board, the culture has arisen such that the board can have more choice when potential ethical, risk and conflict issues arise
Roger Steare (2012)
argues that many boards currently do not understand their culture properly, nor what they are role-modelling to the rest of there organisation
Steare
suggests in a submission to the FRC in the 2010 review of the UK Corporate Governance Code: 'it may also be beneficial for boards to explain the behavioural tone which is established in the way it engages with shareholders and the management team and in the actions it takes. This can be seen as a statement of who we are and what we stand for. In this context, boards may wish to explain what management style and behavioural norms they encourage and what behaviours they will not tolerate'
To enable boards to do this,
*Steare
suggest that boards consider gathering individual director feedback such as that measured by his 'Moral DNA' test and by implementing some of the following key actions:
Question the purpose of your business. Is it meeting the needs of all your key stakeholders?
Challenge your own values, decision-making and behaviours as leaders. Are you bringing your humanity to work?
Ask colleagues, customers, suppliers and local communities how they really feel about your business? Does it inspire them? Do they love it? Why and in what way?
When you have the answers to these questions, ask yourself: 'What are we doing well that we need to keep doing?', 'What are we beginning to do well but need to do more of?" and 'What are we not yet doing and need to begin?'
The ICSA 2017 report on 'culture in the charitable sector' provides a number of questions that the board may reflect on to assess to what extent they are role-modelling a positive culture. These include the following
Has the board set out a clear set of values for the charity and are these reflected in its business model?
Do trustes consistently place the interests of the charity, in fulfilling its charitable objects, above their own?
Has the charity proactively considered its approach to corporate partnerships in general and identified any ethical 'non-negotiables' that support the culture and values of the organisation?
Do trustees have personal knowledge of how the charity operates and the impact it has on its intended beneficiaries (and wider society)?
Korn/Ferry looked at what goes into making an exceptional board of directors, the question was asked 'What are the most important characteristics of boards that have an effective culture of quality conversations?'
The quality of the chair
The most important characteristic, the FRC 2018 Code outlines the chair's role in the culture of the board: 'The chair leads the boards and is responsible for its overall effectiveness in directing. They should demonstrate objective judgement throughout their tenure and promtote a culture of openness and debate. In addition, the chair facilitates constructive board relations and the effective contribution of all NEDs and ensures that directors receive accurate, timely and clear information'
Directors having a real interest and commitment to the company and it its activities
An effective board culture is associated with directors who are there for the right reasons, although there may be some level of personal gain that arises from board membership, this must not be the main driver for a director's motivation
To increase the diversity of the board
The Association of Chairs 2017 report lists a number of problem behaviours by the chair that can be markers of poor role modelling
Has difficulty seeking and accepting feedback from others
Fails to make trustees feel their viewpoint is heard and valued even if it is the minority view
Discourages legitimate questioning and challenge
Offers and defends own decision or opinion too early in discussions, with fuming up biased to own views
Tolerates poor behaviour or is unwilling to stand up to dominant individuals
Dominates discussion
Prone to emotional outbursts, eg impatience or defensiveness, making it difficult for others to speak up