THE DNA OF CULTURE: Notes For Boards

The challenge is laid down. Boards must be fit for purpose. Times have changed and the Banking Royal Commission made it clear that primary accountability for culture rests with the board.

Until now, culture has not been regarded as board members’ responsibility. Historically culture has been treated as operational: now it is strategic.  Yet little is written in the governance literature to assist directors in effectively handling this newly named board responsibility.

Further, board culture and governance practices specifically are under scrutiny. Board culture is not only linked to a few governance particulars like risk, remuneration and misconduct. Culture exists in every facet of the organisation. This is the case across industries.

While the Haynes Royal Commission declared the Board has primary responsibility for culture, what does that actually mean?
What is your role and what do you do as a board?
As the chair?
How can you make room to take on additional responsibility and do it justice? There is so much on your plate already.
More specifically, what attention do you give to the culture of the board itself?
Do the current governance practices fit what is now expected of sound board culture?

If you read Hanes statement above carefully, you can see the extent of the challenge. It is your board and executive culture, your governance practice, and remuneration practices that require close attention. Better that you start a discipled process of attention and enquiry than have it done to you by an outside source.

You need an edge. Because a little knowledge can be a dangerous thing, a starting point is to gain a fuller understanding of organisation culture. Knowing what culture is and what it is not, will equip directors and executives with the basics to recognise the fallacies and the capabilities of cultural responsibility.  The material is covered in Part One in the series written for boards and CEOs, The DNA of Culture: Respecting the Foundations. It outlines the multiple dimensions of organisation culture and what influence the board and individual directors have on the culture. You already have that influence, yet without awareness it is a wildcard that can go in any direction.

The next point is seeing the whole cultural landscape and applying it to your organisation and its particulars. This provides an appreciation of the cultural traps and warning signs for boards in shaping the culture, as well as the imperatives for boards to ignore at their peril. It is spelt out in Part Two of The DNA of Culture: The Landscape and the Traps.

Once you have a broader and deeper perception of culture, a method and strategy is needed for the board in shaping the culture. The opportunities for boards are investigated through an advanced methodology. Applied to your board situation, it opens up energy, increased agility and favorable options for cultural and risk strategies. This builds on your strengths. The method and opportunities are laid out in part 3 of the DNA of Culture series, Fresh Mind Approach.

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