In "5 Guidelines for Structuring Board Oversight of Corporate Culture," Boardroom Resources identifies - based on seasoned director insights - specific actions and approaches boards can consider to effect their oversight of the admittedly amorphous "corporate culture."
Among the key takeaways:
- Conduct an audit of past incidents (over the past 3, 5, 10 years) that will educate the board on the number, frequency, and nature of incidents and settlements, keeping in mind that the occurrence of few incidents doesn't necessarily indicate a positive culture; rather, few incidents could indicate that the environment doesn't support employees speaking up out of fear or intimidation.
- Boards should have an opportunity to review employee culture surveys in their entirety (not just a management summary) and that are capable of being filtered by gender, tenure, geography, job function and other relevant data points for patterns and trends that may be telling cultural indicators.
- There is no one-size-fits-all board oversight structure. Whether oversight lies with the full board - or a board committee that periodically reports to the board - depends on the board dynamics, committee structure, composition, and factors such as the company's maturity, industry, organizational structure, etc.
- Directors need to seek out information that will inform their understanding of the culture rather than merely relying on ordinary-course management reporting. This proactive approach may entail site visits; reviewing employee and customer reviews and chatter on websites and social media sites like Glassdoor, Indeed, Amazon, Yelp, and the BBB; and actively engaging with members of management.
- Board culture also matters for purposes of whether the board is well-positioned to oversee the corporate culture. Specifically, factors such as board diversity and a culture of candor wherein directors are comfortable raising potentially controversial issues and expressing diverse views, are important.
See also these prior reports on board oversight of sexual harassment and corporate culture: "Corporate Culture Oversight: Here's How!" and "State Street Prioritizes & Gives Guidance on Corporate Culture"; this Anti-Fraud Collaboration webcast; and numerous additional resources on our Corporate Culture page.
This post first appeared in the weekly Society Alert!