I write and lecture often about the risks of an unhealthy or toxic culture. Last year, I was honored to partner with longtime friend Cynthia Cooper to publish research undertaken for AuditBoard on “Internal Audit’s Role in Unlocking Culture as a Catalyst and 21st Century Differentiator.”
One of our findings was that boards are generally not seen as having a significant influence on the culture of the organizations they oversee. In fact, the board ranked a distant fourth when respondents identified entities that do influence organizational culture. As we observed in the report:
“The fact that boards may not be seen as having substantial influence on culture may stem from findings that they do not focus extensively on the topic as part of their oversight role. EY’s 2021 The Board Imperative survey found that 27% of boards never or rarely discuss the culture needed to support organizational strategy, and only 22% of board members ‘expect that a misaligned culture will more than moderately impact their business in the next 12 months.’ The survey also offers an enlightening comparison of ‘leading’ vs. ‘developing’ boards relative to how often they discuss talent- and culture-related topics, showing a significant gap in many areas.”
That boards don’t focus extensively on their organization’s culture is cause for concern. But what about the culture of the board itself? History is replete with companies/organizations that experienced major, culture-induced failures that their boards never saw coming. Were the boards caught by surprise because they weren’t focused on the company’s culture or because they weren’t focused on the culture of the board itself?
As BoardSource, a nonprofit organization that supports board effectiveness, notes:
“Whether you know it or not, your board has an internal culture. How your board members communicate with each other, work as a team, and make decisions all define the culture of your board. And the nature of that board culture has a significant influence on the way your board carries out its work and shapes your board’s performance.”
PwC, in a recent article, goes further in dissecting board culture: “In practice, no boardroom culture is perfect. Every board is plagued by derailed discussions, dismissed opinions, side conversations, directors who dominate, and those who seem to be biting their tongue.”
I have served on behalf of or on a number of boards in my career. Let me say right up front that members of these boards were almost always dedicated, conscientious and hard-working. But the culture of some of the boards was seriously flawed – leading to suboptimal oversight or worse. From my experience, a weak or toxic culture on a board of directors can manifest and have significant, negative impacts on an organization.
Here are some signs, and the consequences I have observed, of a poor board culture:
In my opinion, board culture is an overlooked risk to organizational effectiveness. Even when the culture reflects glaring weaknesses, management, internal auditors and others may be unable or unwilling to call it out. Given the board’s place in the governance hierarchy, it falls squarely on the board’s members to take a hard look at their own culture and advocate for and drive change.
Addressing these issues can require a concerted effort to change the board’s composition, structure, processes and, ultimately, its culture. A weak culture not only impacts a board’s effectiveness, but it can trickle down to impact the overall performance and health of the organization.
I welcome your thoughts on LinkedIn or X. Or drop me an email at email@example.com.