Chapter 7 – Culture in the boardroom

Question 1

According to Hofstede, an individual’s culture has a variety of levels, which are: GRONGS

Answer 1

• Gender, having different assumptions and expectations of females and males
• Regional and/or ethnic and/or religion and/or linguistic
• Organisational, with different organisations having their individual cultures and subcultures
• National, according to one’s country (or countries for migrants)
• Generational, being the differences between age groupings
• Social class, linked to educational opportunities and occupations

Question 2

According to Schein, what are the 10 categories of culture - REFRESH-CGF

Answer 2

1. Rules of the game: implicit, unwritten rules for getting along in the organisation, the ropes that a new member must learn in order to be accepted e.g. I must not directly challenge the aggressive CEO
2. Espoused values: articulated, publicly announced principles and values that a group claims to be trying to achieve
3. Formal philosophy: broad policies and ideological principles that guide the group’s actions towards the requirements of their stakeholders, e.g. organisation-specific CG codes of conduct
4. Root metaphors or integrating symbols: physical layout and artefacts e.g. visible and tangible evidence of things in the office or rotating offices to ensure all stakeholders are engaged
5. **Embedded skills **– special competencies e.g. challenge another’s perspective with respect, tact and care
6. Shared meanings
7. Habits of thinking and mental models: shared cognitive frames that guide our perception, thought and decision-making
   8.Climatephysical layout and the way in which members interact with each other and with outsiders
8. Group norms: implicit standards and values that emerge in working groups
9. Formal rituals and celebrations

Question 3

According to the FRC’s Guidance on Board Effectiveness, a healthy culture is one that has ther attributes of HORARRAAS

Answer 3

1. Honesty
2. Openness
3. Respect
4. Adaptability
5. Reliability
6. Recognition
7. Acceptance of challenge
8. Accountability
9. Shared Purpose

Question 4

According to Pick, what can go wrong with board conversations with a negative dynamic?

Answer 4

• Lack of engagement
• Conformity
• Information asymmetry
• Individual concerns may not be raised

Question 5

According to Tomorrow’s Governance Research (2012) research on cultural dynamic on boards, what are the 4 reasons for poor conversations? DILU

Answer 5

1. Dominant personalities / groups of people
2. Inappropriate allocation of time
3. Lack of preparation
4. Unhelpful manner of presenting information

Question 6

What are the four types of power culture identified by Pearce and Zahra? CSPP

Answer 6

1. Caretaker board – high CEO power and low board power: ‘review and approve’ board type – weak board exists simply out of legal necessity and leadership vacuum
2. Statutory board – high CEO power and low board power – ‘ratifying’ – rubberstamp executive decisions
3. Proactive board – low CEO power and high board power – supervisory board – strategic/shareholders control – usually comprised of NEDs
4. Participative board – high CEO power and high board power – shared leadership – discussion, debate and disagreement

Question 7

According to the King Code, how can an ethical culture be instilled?

Answer 7

King Code: The governing body should lead ethically and effectively and should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.

Question 8

What are the three types of performance culture?

Answer 8

1. Learning culture - board evaluations and growth mindset
2. Task culture - focused purely on the task
3. Relationship culture - focused on building relationships

Question 9

According to Tricker, what are the four types of operation when viewing task and relationship cultures?

Answer 9

• Rubberstamp board - low concern for relationships and tasks
• Country club board – high board relationships, but low regard to board tasks – feels nice but prone to group think
• Representative board – low concern for relationships, but high regard to board tasks – group cohesion may naturally be lower but will act in interests of stakeholders
• **Professional board **– high concern for relationships and high regard to board tasks – high performing board – strong team cohesion, married with well-delivered and diverse challenge

Question 10

According to Korn Ferry, what was rated as the three highest characteristics to have an effective culture in an organisation?

Answer 10

1. Quality of chair
2. Directors having a real interest and commitment to the company and its activities
3. Diversity on the board should be increased