Board culture significantly influences board performance and constitutes a key determinant of corporate governance. In the words of Herb Kelleher, the former chief executive officer of Southwest Airlines, culture is “what people do when no one is looking”. Effectively, board culture refers to the combination of mindsets, beliefs, values, hidden assumptions, group norms, and artefacts that influence the directors’ attitudes and behaviours in board meetings, the style of board interactions, board decision-making style, and level of trust among board members. Positive and healthy board culture is a valuable asset in corporate governance. A healthy board culture helps the company create long-term value and obtain a competitive advantage because the culture enables the board to adopt effective and strategic resolutions. A company’s board culture should be synchronous with the company’s values, strategy, business model and long-term goals. Since a company’s board of directors is the collectivity of all the company directors, all individual board members have a role to play in creating a positive board culture.
Individual board members should ensure that the board’s composition is consistent with high performance. For instance, diverse commissions are associated with high board performance. Effectively, when selecting new directors, the individual board members should ensure that gender and ethnic diversity. The board should also provide diversity regarding the board members’ professional expertise. Moreover, in selecting new board members, the individual members should focus on the candidate’s temperament. They should prefer candidates who tend to challenge the organization’s complacent thinking by proposing new ideas. This way, the board culture becomes collaborative and inquisitive rather than cultures where some members are passive due to the need to be agreeable with others and get along well.
Board members should ensure that the engagement and discussion style adopted by the board allows meaningful engagement by all members. The meetings should be collaborative. Relatively quiet directors should be encouraged to participate by ensuring that the discussions go around the table and soliciting opinions. The directors should encourage each other to participate by taking turns voicing their suggestions and ideas while respecting each other’s views. They should be careful not to dominate meetings in a way that dissuades others from engaging meaningfully in the conversation.
Individual members may also contribute to a healthy board culture by providing feedback to one another on their values, attitudes, beliefs, habits, assumptions, and mindsets that affect the healthy working of the board. This feedback mechanism ensures that negative habits and behaviours are discouraged and improved, and positive habits are encouraged. Such feedback also allows the individual board members to learn from each other as they pull towards the desired board culture. In addition, personal self-assessment would also help respective directors self-reflect on their behaviour, attitudes and mindsets and how the same impacts the board’s operations. This self-assessment enables growth and improvement as to whether they contribute to more collaborative, cooperative, and collegial board deliberations and engagements.
As an individual member, the board’s chairperson plays a critical role in shaping a company’s board culture. They can contribute to a positive board culture by directing or leading others to focus on the more important and urgent tasks first. The chairperson using their leadership role, may direct which model the corporate culture adopts. In cases where the issues under deliberation require an inquisitive or collaborative approach, the chairperson may lead the engagements accordingly. For example, they may minimize the time spent on operational reviews and reserve more time for questions and opinions from plenary and assessing potential alternatives. The chairperson of the board of directors also helps to create a safe and healthy environment where every member feels comfortable and safe to share their views.
Board members may also nurture a healthy board culture through mutual support and respect. For example, they may adopt the art of inoffensive contentiousness. This means they should be courageous enough and tryst their convictions when they feel that the suggestions and recommendations by the senior management are inappropriate. They should reject them politely and respectfully while suggesting alternative proposals. This way, the board will have diverse ideas to work with, contributing to better decision-making. Further, in working collaboratively and cooperatively, they should be careful not to command or micromanage each other. Whenever the ideas of their colleagues merit support, they should genuinely support them.
Individual board members should be open-minded in light of diverse ideas to promote objectivity in assessing alternatives and progressive decision-making. They should have flexible mindsets and think innovatively. The central focus should be on the rationality of the proposals, suggestions, opinions and recommendations. A fixed mindset that is resistant to change is unhelpful in board deliberations. For this reason, the mindset of the candidates should be assessed when various candidates are weighed for their potential services at the board. Only candidates with open mindsets and predisposed to think innovatively should be considered.
Board members may also contribute to a positive board culture by reading widely and staying abreast with new developments in the industry and trends among stakeholders. They should engage in ‘pre-meeting research and preparation. This ensures the diversity of ideas in board engagements. Board leaders are likely to present only the ideas and information that reinforces their preferred positions to the board. Pre-meeting research and preparation enable the directors to be inquisitive and objectively assess the available alternative approaches. They should cultivate active listening in board meetings. Active listening ensures that the members avoid cynicism and sarcasm, making the board meetings toxic and unfriendly.
In conclusion, individual board members play a pivotal role in influencing the board culture model and cultivating a healthy board culture. They can do this in a variety of ways, as discussed above. Individual board members should ensure that the board’s composition is diverse and that the board’s engagement style enables meaningful contributions by all members. They should provide feedback to each other regarding their habits, assumptions and mannerisms affecting the board culture. They should also be respectful and supportive of each other. Further, board members should engage in pre-meeting research and preparation and master the art of inoffensive contentiousness in meetings. This ensures that the board gains from the benefits of board diversity. Individual members’ habits, assumptions, beliefs and behaviours collectively contribute to a company board culture. Therefore, each individual must actively contribute to positive board culture.
