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Board Oversight: Tackling the Corporate Culture

By Randi Morrison posted 10-06-2017 08:11 AM

  

EY's "The board's role in corporate culture" outlines the inter-relatedness of the corporate culture and company strategy; identifies ways in which boards are already (whether actively or passively) involved in shaping the corporate culture (e.g., CEO selection, management succession, executive compensation); and suggests numerous indicators that the board can monitor and action steps it can take (e.g., externally-facilitated reviews) to enhance its oversight role.

Those who have experienced a corporate culture-related mishap may easily relate to the memo's "culture eats strategy for breakfast" quote and associated explanation - which serves as a good reminder of why this issue is so important:

This quotation ["culture eats strategy for breakfast"], attributed to management expert Peter Drucker, supports the theory that culture beats strategy. A good culture will defeat a bad strategy, and a bad culture will defeat a good strategy. As a result, culture emerges as an important driver of company performance and value.

The memo includes a helpful list of questions for the board to consider that may serve as a great meeting agenda launching pad for those boards that are grappling with how to affirmatively tackle this amorphous issue. 

See also these WSJ articles: "After Uber and Wells Fargo, Boards Wake Up to Company Culture" and "Rules Aren’t Enough to Foster Ethical Behavior," our prior Company Information & Resources reports: "Understanding the Corporate Culture" and Board Risk Oversight: Understanding the Corporate Culture," and numerous additional resources on our Risk Management & Oversight and Compliance & Ethics topical pages.

This post first appeared in this week's Society Alert!

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