Should Company Culture be Owned by the Board?

Should Company Culture be Owned by the Board?

Insights | 11 November 2019

I met with the Chairman of a large membership-based company last year. One of the questions I asked was, ‘Who owns the company’s culture?”

His answer was, “The Board”.

Boards can foster long-term shareholder value by deepening their understanding of their company’s culture and placing it on the Board agenda. This ensures management is forging a culture that is aligned with the company business strategy.

Truthfully, I am disappointed when Boards do not have culture as an agenda item. Culture plays such a significant role in positive business results. This also goes hand in hand with company values, of which I have previously written about.

Typically, most Boards do not apply the same rigour to culture as they do to strategy, risk or CEO succession planning. According to a McKinsey article, “organisations with top quarter cultures post a return to shareholders 60 percent higher than median companies and 200 percent higher than those in the bottom quartile.”

Boards everywhere should take an active position that recognises the crucial role culture plays in any organisation, rather than leaving this to the CEO and executive.

A company culture can make or break even the most insightful strategy or the most experienced executives.

Good culture produces innovation, growth, ethical behaviour and customer satisfaction – it cannot be replicated or copied. Sadly, it seems many Boards struggle to understand what this responsibility means for them. This changing landscape comes at a time of shifting corporate dynamics, where organisations that foster good culture are the ones that attract (and keep) top talent.

How do you ensure that your organisation is focussed on creating good culture?

About The Author

Ken Sheargold, Chief Executive Officer at PM-Partners group

Ken joined PM-Partners as a Transformation Consultant in February 2016 and took on the role of CEO on May 8th 2017. Ken is responsible for delivering major transformational change where there is complexity, risk, many inter-dependencies and conflicting priorities.

Prior to joining PM-Partners group he held a number of executive appointments in the NSW Government and Telstra Corporation.

His most recent appointment in government was the Executive Director, Premiers Implementation Unit directly responsible for supporting the Premier in the delivery of his key priorities across NSW. Prior to working in the Department of Premier and Cabinet he was the Executive Director of ServiceFirst, the shared services organisation responsible for the provision of shared services to the central agencies of government.

He was the Program Director and commercial lead for the outsourcing of ServiceFirst that successfully executed contracts with Unisys and Infosys in June 2015 with a total contract value of $235 million dollars.

Prior to joining the NSW Government, he held a number of senior appointments in Telstra Corporation. Those appointments included Executive Director Corporate Strategy and Customer Experience and Executive Director Service Advantage.

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