Identifying and Responding to a Dysfunctional Culture

Key Actions for Boards

For the past year, headlines have screamed with incidents of organizations’ cultural missteps or toxic cultures and almost weekly reports of CEO or executive dismissals from infractions. Boards are asking themselves – does our organization have cultural problems, and if so, how do we detect it and respond? 

An organization’s culture is recognized as a critical element for success and differentiation and it can be the rocket fuel for delivering value to stakeholders. However, a dysfunctional or toxic culture creates inefficiencies and daily instances of under-performance across the organization. At its worst, cultural blow-ups can damage a company’s reputation with negative media coverage, put the organization in breach of laws and regulations, lower productivity, a failure to deliver on strategies, and be very costly to resolve.

There is a significant body of research on the importance of culture in driving organizational success, the core building blocks of organizational culture, as well as guidance for boards in their role in oversight of organizational culture. Despite this, in many boardrooms, culture is not yet a regularly scheduled agenda item or there may be limited updates on the organization’s culture or the process to drive the desired culture.

This needs to change. As organizations and boards face growing questions on culture from investors, regulators and employees, it is critical that directors have regular, structured and detailed updates on the health of the organization’s culture. Directors also need to prioritize regularly scheduled discussions on culture. Typically, the role of the director is summed up as: “nose in, fingers out” (i.e. oversight but not management.) With regards to culture the role of the board is now to “nose in, nose in, nose in” - to look deeper, ask questions, and probe for details when something seems amiss. 

Our new report, Identifying and Responding to a Dysfunctional Culture: Key Actions for Boards provides 15 actions directors can take to get insights on the organization’s operating environment and guide leadership in setting and sustaining the right culture for the organization.

Tapping into the experience of global members of WomenCorporateDirectors, this paper arms directors and other corporate leaders with the right questions to ask and the types of data, incidents, and trends to track to draw out a real picture of the organization’s culture.

Download the report to learn more and contact us to discuss how we can help your organization build a strategy-supporting culture.

Identifying and Responding to a Dysfunctional Culture