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The Boards role in setting the tone for Culture


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Hakan Alac

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Progressive organisations have put a lot of thought into culture, and the subject matter has been much discussed over the years. And this makes total sense. In my experience culture is one of the leading factors in attracting, engaging, and retaining people – and to businesses this has real commercial implications. Just consider the attrition rates of toxic businesses that you are aware of – and what about the damage caused to reputation and good will? Also, accountable organisations don’t’ foster a culture allowing leaders to do foolish things, like firing hundreds of people over a zoom call, as in the case of U.S. online mortgage company

We know that culture itself is not developed though a brainstorming exercise and simply embedding a bunch of aspirational words that look good on a website. Fundamentally it’s a feeling; a belief in an idea or purpose that is shared by everyone in the organisation - that resonates with your values, and ultimately lead to actions and behaviours aligned with why that organisation exists. Collectively lived, these actions and behaviours define an organisation’s culture, or personality.

Ultimately, culture is defined by people, and whilst this includes people at all levels, I would like to focus on the board’s role in defining and influencing culture from the very top.

As the guiding hand of an organisation, the board is a major influence in setting the tone from a big picture perspective. Its management, organisation and interactions with people cascades downwards impacting all layers, and hence the entire organisation. But I wonder how much thought boards have put into understanding its own personality, and its individual role in all of this.

If high-performance boards positively impact culture, and they do, then what are the characteristics of high-performance boards that create great culture? Here are three common traits:

  • Openness and transparency: People need a crystal-clear path to operate effectively, an understanding of the boundaries, and an accurate assessment of where they stand. Ambiguity, secrecy, and inconsistency erodes trust, and disengage progressive leaders. Over time, this leads to weaker organisations filled with sub-optimal performers. Great boards work hard to live and promote an open and transparent environment, which leads to higher levels of trust and respect between all directors and leadership.
  • Accountability: High-performance boards embed a sense of accountability, and continually review whether there was trust and transparency in their activities, between directors, and with leadership. Identifying and tactfully addressing underperforming individuals – particularly if their behaviours are inconsistent with the values of the organisation – sends a powerful message about accountability that reaches the entire organisation.
  • Healthy relationships. High-performance boards have great working relationships between directors and with the senior leadership team. They work hard to strengthen relationships and foster a supportive environment – but can also tactfully challenge and scrutinize with a view of positively influencing outcomes.

Progressive boards are continually reviewing their decisions around appointments, systems, processes, and practises to determine whether, ultimately, the right decisions are made, and how they can do things better next time. Boards that succeed have an insatiable learning mindset together with transparent, accountable, and collaborative characteristics that are the hallmarks of a high-performance culture.

Therefore, how a board sees itself and the choices it makes are critical. Boards need to be continually asking themselves:

  • What is the current culture of the board? Do we really understand it, and how is it shaped? Has it changed, in what way and why?
  • What are we doing to crystallize the standards of culture, and ensure they are purpose-driven rather than created by accident?
  • What are the values and behaviours that we should come to expect that would serve us well as we evolve? Do our directors and senior leadership align with these? What are their motivations, and do they have a genuine interest in the organisation’s development?
  • How do directors come to decisions and what are the biases that potentially impact their thinking? Are they transparent in sharing information and open to discussion about the “sore points?”
  • Do we have the right diversity and representation on the board?
  • Are we doing everything to promote a transparent, collaborative, and accountable environment? Is everyone offered the same respect and consideration?

Organisations with a strong positive culture share common characteristics and can be detected a mile away. High-profile leaders are attracted to such organisations and are less likely to leave or be discontent, which in turn has material commercial implications. However, building culture isn’t easy. It requires a concerted effort to ask the tough questions around what individuals are doing to set the tone and build a positive working experience. In this regard, the board is a major stakeholder, and should continually and actively consider its role in shaping the organisation’s culture from the top.

About the Author

Hakan Alac is the Founder and Managing Partner of Alac Partners. Hakan works closely with business owners, boards, and C-Suite leadership to unearth and build highly effective boards, directors and executive leadership capable of radically transforming their organisations and directing them to sustainable growth. He is also an executive coach to many senior leaders in the Middle East.


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