Aligning culture with strategy sets the stage for long-term, sustainable prosperity. Yet companies struggle to define and pursue cultural goals. At the recent Corporate Board Member two-day summit, “Building Better Boards,” compensation committee panelists shared insights on what boards can do to help:
On influencing culture…
Brad Oates, Compensation Committee Chair, CIT: “Culture is hard work, and there’s no way to sugarcoat it. But you can architect a culture, and you can change a culture over several years. It is not an overnight process. There are no quick fixes, there’s no two-minute fast-food kind of appetite here. I believe the board’s most important responsibility is to clearly identify what kind of culture you want and, then, how are you going to achieve it… From my experiences, at the end of the day, I would say culture is influenced more by the tribal traditions and organizational units than anything else. Fostering the kinds of tribal traditions that set performance bars high and challenge people to exceed those performance hurdles is really the change agent that I’ve found, and I’ve found that to be true with championship teams as well as championship organizations.”
Ravi Saligram, CEO and Director, Ritchie Bros.: “Can it be influenced, can it be changed? Absolutely. At Ritchie Bros., a heavy equipment, construction business, there was not a single female in the executive ranks when I joined. And we’ve changed that over five years… My first hire was my CFO, and I told the recruiters, if they brought me a single male resume, I would throw them out. They said, ‘No, you want the best athlete.’ I said, ‘There are a lot of great women best athletes.’ So, they put eight great women in front of me, and I picked one who is now actually co-CEO as I’m stepping down at the end of this month. Today, [our executive team is] 21 percent women. But you’ve got to make it a focus, and you’ve got to constantly preach it, and you cannot flinch when people throw a lot at you and say no.”
On the board’s role….
David Astorino, Senior Partner, RHR International: “Compensation can absolutely be aligned to the kinds of things we want to see often with our senior executives… When you start to tell the story with the board together, as you kind of embark on the journey, you’re starting to outline, here’s where we are today, here’s where we’re trying to go, here’s the strategy…all the innovation, new growth, new product development, there are metrics you can attach to that. And there are a bunch of metrics you can look at around the human capital side. So, I think you can actually get quite concrete about what metrics you want to look at.”
Oates: “One of the struggles that we have in this idea of culture is that because culture is percolating from the ground up, the board as a whole is at least three steps removed from where culture is somewhat built and formatted. Culture isn’t something that is easy to command and control. And so, as a result of that, boards have naturally struggled with [how to] impact their culture even if they are now responsible for cultural outcomes. And so, that dilemma, I think, is what we’re all grappling with.”