Give HR a seat at the table
Most boards have a full agenda every meeting and adding one more report or segment may not be well received. But, in order for the board to fully understand an organization’s culture, that culture must be represented, just as finance, legal, compliance, and operations are. Generally, the head of HR can present the board with regular updates on company morale, programs, problems and issues, and can also provide color as to the metrics discussed in the prior section of this article. In situations where the board agenda is just too full to permit an additional half hour to hour discussion on people, adding a report on cultural issues, turnover, complaints, and talent development and training twice per year or to an existing committee meeting may be more acceptable. The compensation committee is a likely candidate as HR is generally very involved in compensation and performance issues and already participates in those meetings.
A second important means of having cultural aspects of a company fully represented at the board level is to make HR leadership or experience a desired factor in a board member’s background. Directors with experience in HR, recruiting, and personnel development provide a different perspective on people and culture issues than do directors with operating or finance backgrounds.
Get out of the boardroom
Boardroom presentations provide directors with filtered information and keep them at arm’s length from the firm’s employees. Holding board meetings at operating facilities in diverse locations allows directors to not only get a deeper understanding of the business but also allows them to meet employees at various levels of the organization. These meetings, which can be morale building high points to the visited locations, let outlying operations get a sense of who the “board” is and to present the directors with direct, unfiltered information. An aware board member will quickly get the “feel” of the operation and the local culture. A frequent criticism of board members is their lack of in-depth understanding and knowledge of the business. Getting them into the field increases the individual director’s knowledge of and bond with the business and its people.
Make culture an interview topic
Culture is a product of people, their individual backgrounds, and their agendas. Wells Fargo learned an expensive lesson when the aggressive culture at Norwest Bank became its dominant culture following Wells Fargo’s acquisition of Norwest and the rise of the Norwest senior management team to the highest levels of Wells Fargo. A senior management candidate’s perspective on culture should be probed and analyzed for fit with the company’s culture – either the existing culture or a new culture being sought through external candidates. Even more than financial or operating results, the impact of a new senior executive on a company’s culture can bring value or implant seeds of trouble down the road. Multiple interviews of C-suite candidates by board members can be a valuable tool in considering the cultural attributes of a new executive. Perhaps HP could have avoided some of the monstrous loss of shareholder value had a majority of the board met at least once with the successful candidate for CEO – a shortcoming that happened twice at the company.
Board members will never have the knowledge and intimacy with the business that management has, but we believe that implementing routines such as those described above can deepen the board’s understanding of the organization’s culture and people and will serve the board, the company, and its shareholders well and long into the future.
Read more: Inside DaVita’s Corporate Culture: ‘A Community First And A Company Second’
