By Paul Dubal, Governance Coach
Organizations have a wide range of cultures, those unspoken norms of behavior that define how the company operates, and which can be an important contributor to the success of a company. Some companies see themselves as competitive, some are conservative and bureaucratic in their approach. Still others may be creative or cutting edge, for example a tech start-up.
It is informative to know an organizations’ culture before joining a board because it needs to be a good fit for your personality, skills, and ambitions. Each type of company and its accompanying culture will require a different set of skills and approaches. The culture of a start-up which may need nurturing of the founder and their entrepreneurial spirit will require different approaches to an older, established enterprise-sized organisation.
The company may be growing, or it may be in distress. Is the company private, and is it preparing for a flotation merger or acquisition? Is it a listed for-profit entity, or is it a smaller not-for-profit? What is the regulatory environment in which the company operates? The type and purpose of an organization will impact organizational culture. Whatever the organization, its culture is a powerful force, and both reflects and shapes the way an organization operates. It is often a significant part of why people work there and why people do business with the company. Employees want to work in a trustworthy and collaborative environment. It defines a company’s values, aspirations, and goals.
A company’s culture affects everything from employee interactions with customers and career satisfaction to mental health. It is arguably more important than ever as the newer generation of workplace entrants are looking beyond salary at a wider group of factors that influence their decision to work for the company, including the work environment, career prospects and whether it is ‘safe’ mentally and physically to work there. Culture shapes the identity of the company and its reputation in the market. As a director you will be spending a significant amount of time immersed in the organization, so identifying with its culture is important from a well-being perspective. If you’re not comfortable with an organization’s culture, you are unlikely to give your best or want to stay for a full term.
Company and Board Culture Due Diligence Checklists
There are several tasks you can undertake to assess the company’s culture before joining the board:
- Research the company. Consider its purpose, mission, and core values. Do they align with your own aspirations? Review the company website to get any insight into the corporate culture.
- Check social media to see what people are saying about the company. What are employees, customers, media and other stakeholders posting on social media about the company? How is senior management viewed by the staff? Are employees sharing their work experiences on social, are they advocates who are proud to work there?
- Reach out to employees, customers or even suppliers of the company. Talk to your network of contacts. What is being said and importantly what is not being said (are they reticent and afraid to tell the full story?) What is the company’s reputation in the marketplace? What are its stakeholders saying? Are employees valued, motivated and engaged, or does the staff turnover suggest otherwise?
If you are satisfied with the company culture, drill down further and assess the board culture:
- Assess the experience and temperament of the board and senior management and whether you will enjoy working with them on a one-on-one basis. Have any directors or senior management recently left the company and if so, why?
- Check the dynamic between the board and management. You will need an insight into the experience and background of the directors and senior management. Does the CEO encourage open and collaborative environments between the board and management? Is the CEO committed to listening to the board’s input and can directors interact with senior management without the presence of the chief executive?
- Meet the Chair and as many of the current directors as possible. Ask for and read the last two years’ worth of board minutes as these will give you an excellent insight into both the culture and the processes of the board, for example, how decisions are made.
- Ask to see the results of the last board evaluation. What does it tell you about the dynamics of the board, and have recommendations been acted upon or do the board consider it more a tick box exercise? Has there even been a board evaluation?
If you work with an organization that enjoys a good corporate culture, and that is reflected by the board culture (which often sets the tone for the wider corporate culture) you will experience higher satisfaction and greater productivity during your tenure as a board director. Fit has never been so important, so use these due diligence checklists to avoid getting burnt. The Governance Boutique is expertly positioned to advise aspiring directors to undertake due diligence for a potential board position, of which culture is only one part. If you are keen to get on board and are not sure where to start, book a call with us today. If you found this blog useful, subscribe to our newsletter to remain informed, educated, and supported in your aspirations.