Ensuring a good culture is one of the key roles of any board – maybe even the most important one. Jo Cribb takes a peek into the black box of New Zealand’s boardrooms.
Anyone else wonder what The Farmers Trading Company board members nattered about after they decided to dock the pay of their Auckland support staff unless they returned to the office at Level 3?
Was it the same cheerful chatter of the boards of The Warehouse and Briscoes who decided to pay their staff fully under all alert levels?
We rarely get a peek into the black box of the nation’s boardrooms.
But now and then something oozes out that suggests all is not well.
Like last month’s report from the Financial Market Authority on insurance companies. They found some boards currently do not see that the conduct and culture of their organisations is of any relevance to them.
With thousands of hours of board meetings under my belt, either as a director or facilitator, what is increasingly clear to me is that it is not only what boards do, but how they do it that matters.
First, there are the dynamics around the table – how boards behave and treat each other.
The loud one who sucks the oxygen from the room, the quiet one who has the best insights but rarely shares them, the A team and B team, the chair that pushes through their own agenda.
This is a recipe for poor decision-making. The whole point of a board is to bring together a range of perspectives to make better decisions.
Then there are how well directors govern the culture of their organisations.
According to the Australian Institute of Directors, directors can influence the culture of their organisations in three ways.
First, they need to set clear expectations around what a good culture is.
Modelling the expected culture around the board table would be a great start. But I am sure we can all name organisations whose missions are about empowering people, but the boardroom is a bloody battlefield.
Second, boards need to ensure their decisions align with and reinforce their expectations of good culture. Decisions about strategy, metrics, and policies all need to fit with the espoused culture.
Back to The Farmers Trading Company board. They make a lot about their ethics including being “committed to improving social, ethical and environmental standards throughout our supply chain and in all aspects of our operations”. Not sure their staff and increasing numbers of ex-customers would agree that forcing workers back to the office or cutting their pay aligns with improved social and ethical standards.
Finally, boards need to regularly test that their expectations around culture are being met. This might be through metrics and measurement that come through formal board reports. Some do this very well through ‘’taking the pulse’’ type engagement surveys of staff and customers.
It might also come through getting a sense of how things are going, like the atmosphere in the office or their experience as a customer. Many boards schedule their meetings in different offices and directors take time to chat with staff.
I wonder if The Farmers Trading Company board members have sense-checked the comments on some of the latest Farmers Facebook posts?
Ensuring the culture of their organisation is good is one of the key roles of any board.
While most of what happens around the board tables in Aotearoa rightly stays in the room, the wee glimpses we get now and then suggest that directors’ role in governing culture may not always be front and centre, either in how boards conduct themselves or in the decisions they make.