5 Ways Boards Can Lead Corporate Culture

An increased focus on DEI, “Quiet Quitting,” bad behavior by employees and leaders…these are just some of the valid reasons, for better or worse, that corporate culture is at the forefront of organizational initiatives today. Whether it’s to limit risk exposure or to focus on creating a more positive, resonant, and inclusive culture for all, there’s good reason continue to make culture a top priority in 2023.

In terms of oversight and accountability, boards need to take the lead in ensuring that good culture is alive and thriving in the organization, there is open and honest communication about culture, and that there is a drive toward continuous improvement.

Boards can and should model and encourage positive culture and values. How do they best do so? Here are the most powerful ways board can lead with culture.

1. Show, then tell

Everyone knows about Tone at the Top, but the value of this adage comes when you really own it. When the board shows it is serious about diversity, integrity, innovation, ethical behavior, sustainability and other approaches to excellence by incorporating these ideals meaningfully into its actions, people pay attention. Efforts to expand diversity at the organization will carry more weight if you first demonstrate your commitment to diversity with your board refreshment strategy. The same goes for the “small stuff” like punctuality, responsiveness, professionalism, and empathy. When it comes to modeling the right tone, there is no small stuff. Good behavior starts with you.

2. Bring the mission to life

Most companies claim to be purpose driven these days, and one way to make sure yours lives up to the promise is for the board to consistently apply the mission to decision making. Use the mission as a litmus test: Does the proposed course of action directly support the articulated mission and vision? If yes, it’s easy to agree on. If not, it begs a deeper exploration to determine whether it merits support. By consistently looking through the lens of mission and vision, they become living values that truly influence everyday decisions for the whole company.

Of course, you’ll want to be sure the Mission Statement is up-to-date and reflects current values and aspirations. And you’ll want to ensure that all board members know and embrace the mission. If it needs rethinking, take the time to get it right. Boards that make the mission central to their own culture might have the mission statement plastered on a wall of the boardroom, or incorporated into every board book, or read out loud at least annually at a meeting. By overtly embracing the mission, the board signals its importance throughout the organization.

3. Be interested in policies that shape culture

As overseers of policies that directly affect employees, customers, partners, and more, including our larger society and environment, the board wields enormous influence over what kind of contribution the organization makes to the world. It’s up to the board to ensure management puts policies in place that govern codes of conduct, anti-harassment, compensation and other factors that affect employee wellbeing. The board also oversees vendor policies that reinforce culture and values: environmental standards, fair trade and/or human rights considerations. Other opportunities to use policy to promote a healthy culture include:

Security policies that protect customers and/or their data
Anti-graft policies to prevent bribery and unethical business behaviors
Policies that guide how the company interacts with investors.

The board, often working through Committees, should ensure that:

Transparent, consistent policies are in place
These policies are properly communicated to all employees
Everyone understands there are real consequences for policy violations.

Be proactive in asking about policy updates and curious about employee feedback. When you show a real interest that goes beyond checking the compliance box, you are likely to learn more and send a stronger message about what’s important to a healthy company culture.

4. Ask questions

Be thoughtful about the metrics or additional data that might help raise awareness about cultural hot buttons. Consider employee-related questions like:

What percentage of our leaders are women or underrepresented minorities?
Have employees initiated any activities that speak to company culture? From volunteer projects to Friday night cocktails, it’s good to know what activities the group enjoys together.
It’s always worth asking if any employees have broached the subject of harassment or discrimination with HR. Not all situations rise to the level of “reportability,” but if you ask, you may learn something, and you certainly signal that you want to hear about it.

Equally important to establishing a healthy culture are questions around:

Customer satisfaction with products and services
Environmental impacts
Foreign business practices
Community involvement
Employee development
Succession planning

5. Hear directly from employees

Most of the board’s information comes from executive leadership, but you can learn a lot by hearing from employees, too. Your organization might conduct an employee survey about cultural issues and/or invite board members to spend time in the office and on the floor. Great ideas to improve the business often come from the trenches!

It’s not unusual for board members to have individual conversations with management team members both to build rapport and get more insight into how things are going. However, before you pick up the phone, it’s standard courtesy to let the CEO and Board Chair know you would like to reach out to team members.

Building relationships with management and getting a sense of employee sentiment through onsite visits gives you more information and more opportunity to influence culture. How you “show up,” what you take an interest in, which questions you ask all carry a lot of weight. Make the most of your position and go prepared to promote the values you want to foster in the culture.

Driving great culture from the top down

Ultimately, the board’s role is to model the behavior and values they want to see throughout the organization and ensure that appropriate practices and policies are in place for a thriving company culture. This starts with their own interactions on the board and with leadership but listening also plays a huge part of understanding the true state of culture at an organization and where there’s room for improvement. Making an investment in opportunities to hear from a wide variety of stakeholders–in and out of the boardroom–is a great first step.