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A good, positive company culture encourages healthy day-to-day attitudes, behaviours and work ethics within an organisation. Importantly, it sets the foundations for real, tangible business growth. By John Harte (pictured ) , Managing Partner at Integrity Governance

As the pandemic starts to ease and boards come out of crisis mode, culture must be one of the first things they turn their attention to if they are serious about moving from survival to delivering long term growth.

Boards are custodians of company culture

Effective boards recognise that they are responsible as custodians of culture – keeping, protecting and nurturing the good things, the ‘assets’, in company culture, as well as shaping it. They are also aware they need to address where the culture is not appropriate and must change for the business to be ‘fit for the future’. In fact, effective boards enact their role in culture by inspiring it, ensuring alignment, demonstrating authenticity by both reflecting and demonstrating the behaviours implicit in the culture, while guiding, encouraging and assuring themselves about it. 

Three types of directors on the issue of culture

Some directors struggle when it comes to culture. We see three populations on the boards that we work with:

  1. The ‘Jurassics’. They view culture as the latest management fad which will pass like previous ones; for example, total quality management and mindfulness.
  2. The ‘restless’. They know that culture is important but just don’t understand or know what to do, or how to deal with culture as a board.
  3. The ‘effective enablers’. These are directors that not only recognise the importance of culture but are vigorous in actively engaging in shaping and directing it. 

The pillars of culture that support business success 

Boards must recognise that the pandemic has demanded four key success factors for effective boards – adaptability, resilience, courage and candour – which remain relevant today and for the foreseeable future. These must be the core pillars of company culture moving forward.

Adaptability and agility are critical factors for evolutionary success and are now demanded of boards and businesses as they plot their way through the uncertainty, volatility and complexity of the COVID age. To deliver a culture of adaptability and agility requires the board to promote an entrepreneurial spirit, which unleashes the potential of their people to provide new ideas to help take the business forward. As part of this, boards must engender a curiosity and fearlessness to inspire creativity, innovation and continuous improvement. Leading by example, by demonstrating diversity of thought and ideas in the boardroom, will give confidence to the rest of the business to follow suit. However, it’s important to realise that it’s only those boards that have diversity across demographics, skills, experience and thinking styles which will have a true diversity of thought.

 

Resilience, the capacity to bounce back from setbacks, is a valued cultural attribute which is in demand as we build back better and orientate for growth in the recovery. To deliver resilience a business needs to have strong, transparent and visible leadership, engaged and empowered employees, and strong brand trust, both internally and externally. 

Courage. It is time for directors to be courageous in confronting reality. As part of this they should have a healthy scepticism but avoid the corrosion of cynicism. In fact, a culture of courageousness must run throughout the organisation. This will see everybody within the business having the opportunity – and responsibility – to speak up, to do the right (if difficult) thing. For this to happen there must additionally be a culture of psychological safety to encourage people to speak up and protect those that do.

Candour. Finally, an open culture where bad news comes more quickly to the board than good news is critical for effective governance and leadership by the board. This way the board can quickly focus on and solve challenges before they potentially become bigger problems, which can easily occur if they are not picked up early. 

Ignorance is not bliss

Those boards that continue to ignore culture face the consequences of a poor company culture. It can lead to a major disconnect between the behaviour that was promised and what was actually delivered by the business, along with bad practice which will damage the reputation of the organisation. Poor company culture – with the subsequent damaging practices and harmful outcomes – is motivating governments and regulators around the world to make directors legally liable for the culture within the companies they lead. 

It is time for boards to step up and become ‘effective enablers’ when it comes to culture and consider how fit theirs is for the future. Fostering a culture of adaptability, resilience, courageousness and candour will play a vital role in ensuring their organisation bounces back as the pandemic eases, putting them in a position to drive long term growth. However, broads must remember to support and demonstrate the culture they shape at all times, to help provide assurance around it. Failure to do so will mean the culture they nurture will not be effectively adopted throughout the organisation.

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