Why cultivating a positive culture can help boards work more effectively

In a high-pressure environment, directors must find time to address culture issues and build a more functional decision-making process. Optimising administration to free up the time for this is one of the many reasons for investing in board management software, also known as a board portal.

Presented by BoardPro

Psychological safety in the boardroom means everyone feels included and safe to contribute. Contrary opinions can be discussed openly. Everyone has a voice. 

When there's a poor culture, people are afraid to speak up, they don't feel they have an opportunity to share. Or if they do, their contribution is discounted, or shut down, or they feel it is not valued.

Culture is relatively new as a topic for business, says Director’s Dilemma CEO Julie Garland McLellan FAICD. “Boards are relatively old compared to the average person in business. We're there because we've got experience, but we don't always have the precise vocabulary or the ability to manage the concepts and hold the conversations.”

The temptation is not to have the conversation at all. But communication is key to an effective board and building a strong positive culture.

Board culture is different to an organisation’s culture. Directors are not working together every day, they are likely to have very diverse experiences and areas of expertise, and when they come together, they generally have very full agendas. Time pressure and the complex matters being discussed means there's generally less focus on culture and how to work effectively together.

In those high-pressure environments, behaviours can default to each person's way of working, rather than what's most effective for the board or for the business, says Georgia Henry GAICD, director at organisation culture specialists HENRY REED.

Developing the right environment that's reflective of what the organisation needs should not be overlooked.

“Culture is all about people,” says Henry. “Most people don't like engaging in conflict and when there are culture issues in the boardroom, they are often not addressed for fear of damaging relationships or of the consequences or reactions that may result. Failing to manage behaviours or culture issues in real time allows them to perpetuate and results in board dysfunction. Creating a safe and respectful environment is essential for board effectiveness.”

Everyone on the board should be capable of influencing everyone else and willing to be influenced, says Garland McLellan. Issues where the board appears to be kowtowing to a CEO or a chair or a founder should be safe to call out. 

“As an independent director, your job is to be the face of good governance,” says Garland McLellan. “That culture of speaking up, that is good governance. You are working for the long-term best interests of the organisation you serve, not the short-term comfort of the board members.”

Different cultures

Understanding the mosaic of different cultures throughout the business is essential, says Garland McLellan. Integrating the positive aspects and helping different areas scaffold good behaviour can bring better efficiency and productivity.

The chair’s role is pivotal in ensuring that the board is running effectively. They should be addressing issues in real time and setting and upholding standards.

Solutions for supporting board culture include having clearly defined expectations for behaviour, using the organisation's code of conduct and values, and having a board charter. These can be easily shared and updated through the BoardPro platform.

Induction procedures for a new board member help to clearly communicate the standards expected, says Henry. “There needs to be a process for raising and reporting matters, and BoardPro provides this in one place, with documentation on hand.”

Culture needs to be reinforced at every opportunity. “Taking a moment at the start of board meetings to reinforce expectations and ending every meeting by asking for feedback on what could be done to improve the culture of the board is a good way of having that built into your agendas,” says Henry.

Culture is never static, says Garland McLellan. “Every time you get a new director, you induct that new director and you tell them what your desired culture is. But even while you're doing that, the fact that they're new and slightly different is impacting the culture. It's something you've got to always be alert to,” she says.

Providing appropriate director education, maintaining an understanding of each director's capability, using a skills matrix, and being able to make sure that directors are getting support through mentoring programs is important. Reviews of director performance and board effectiveness, at least once a year, are essential, Henry says.

Using board management software can make governance easy, putting information in front of all the directors, and giving them time to discuss culture. It can also provide easy access to education for directors.

“The more you know and understand about boards and governance, the more likely you are to do your role well, and the more likely you are to find the extra time for managing the culture. That is why director education is essential for board and organisation success,” says Garland McLellan.