7 - Culture in the boardroom Flashcards
ICSA 2018 - “Organisational Culture in sport”
“… there is growing recognition that rules-based compliance cannot on its own deliver healthy behaviour within organisations. Indeed, the efficacy of rules and processes depends in large part on the integrity of those subject to them.”
Reviews in RBoS, late 2008.
“excessive deference and hierarchy”
Bank was too centralised and hierarchical.
“There appears to be some tendency for them [less senior staff] to filter recommendations in such a way as to maximise the likelihood that senior staff will find the recommendations palatable.”
Hofstede on individuals’ culture (6)
An individual’s culture has a variety of levels:
1. national
2. regional and/or ethnic and/or religious and/or linguistic
3. gender
4. generational
5. social class
6 organisational
Schein’s 10 categories of culture
- group norms
- espoused values
- formal philosophy
- rules of the game
- climate
- embedded skills
- habits of thinking and mental models
- shared meanings
- root metaphors or integrated symbols
- formal rituals and celebrations
Schein iceberg model
top = artefacts and etiquette
middle = values
bottom = basic underlying assumptions
Conversations are more than just words:
- facial expression
- eye contact
- tone of voice
- pace of speech
- frequency of speech
- whispering and asides
- who speaks to whom and how frequently
- gestures
- angle of body
- choice of clothing
- late or early arrival
- interruptions
- note taking (or lack)
- early or late departure
FRC Guidance on Board Effectiveness defines a healthy culture as one that has attributes of:
- honesty
- openness
- respect
- adaptability
- reliability
- recognition
- acceptance of challenge
- accountability
- sense of shared purpose
What can go wrong with board conversations (Merchant and Pick, 2010) (9)
- expert/well qualified may cease to be engaged and ‘loaf’
- group conformity
- likely to discuss info already known, rather than novel - causing info asymmetry
- individual concerns may not be raised
- may take more extreme decisions than any one individual may choose to make
- groupthink
- conversational processes may reflect previously useful but outdated routines
- conflict convos may turn personal, emotional and destructive
- may be vulnerable to particular directors abusing their power
Commonly occuring conversational issues (Chamber, 2018; Tavistock/Walker Review, 2009; Leblanc, 2011) (18)
- Issue discussed whole meeting but unsettled
- personal conflict b/w a director and board
- talkative member takes over - quiet doesn’t speak
- emotional interactions - draining and negative
- Directors fail to signal concern/disagreement
- Engaged in minor details
- Fail to make decisions/constantly revisit
- Directors remote and uninterested
- Domination
- Overly polite and feel consensus must be achieved - no dissenting voices
- Small group sews up decisions before meeting
- CEO is aggressive - control board
- Breaches confidentiality
- overall lack of diversity of opinion
- Chair weighs into topics too early or unduly influences the collective board OR is “owned” by CEO
- Does not assess itself or members adequately/at all
- Overreliance on one director
- Chair seems to favour some directors
Chait metaphors
“To what extent a board is more akin to a symphonic orchestra or a jazz ensemble”
“public watchdog” or “institutional guardian”
- Type I - orchestra - group member and institutional guardian (collegial and cohesive - risk of groupthink and excessive deference)
- Type II - Consultants - free agent and institutional guardian (strong leadership, can risk micromanagement and reduced decision-making ability through info asymmtery)
- Type III - Regulatory agency - group member and public watchdog (compliance and oversight focussed - formal and bureaucratic - significant reporting - lack ability to be strategic)
- Type IV - Lone rangers - free-agent and public watchdog (weaker culture - representing their stakeholder interest, rather than cohesive collective - risk of pillar to post with zigzagging strategy - exec/non-exec working at cross-purposes)
Pearce and Zahra (1991) board cultures
- caretaker - weak board that exists out of legal necessity and a leadership vacuum)
- statutory - advisory - prototypical of ineffective - rubberstamp
- proactive - low CEO and high board power. strategic/shareholder style.
- participative - high both power - collegial - shared leadership - discussion, debate and disagreement
No difference in composition but participatory boards included significantly more women and had better board processes
Nadler board models
Passive board - functions at discretion of CEO
Certifying board - confirms to shareholders that CEO is doing what board expects
Engaged board - partnership - dialogue and decision-making
Intervening board - intensively involved in decision-making during crisis - convenes frequent and intense meetings, often at short notice
Operating board - makes all key decisions that execs implement - fills gap in management experience.
Covey’s 13 behaviours that can be measured and benchmarked to high-performing teams
- talk straight
- demonstrate respect
- create transparency
- right wrongs
- show loyalty
- deliver results
- get better
- confront reality
- clarify expectations
- practice accountability
- listen first
- keep commitments
- extend trust
Tricker’s framework of board styles of operation
- Country club board (high relationships, low tasks)
- Professional board (high relationships, high tasks)
- Rubberstamp (low relationships, low tasks)
- Representative (low relationships, high tasks)
Korn/Ferry looked at what goes into making an exceptional board of directors - most important characteristics
93% - “quality of chair”
