RN #006 When culture helps to manage risks

In my combined 5 years of experience serving on the global boards of ACMP and IAF value creation happens when culture is well-aligned to business strategy and it gets the full backing and support of top leadership with the aim to reduce business risk. And yet according to EY’s Global Board Risk Survey 27% of boards never, or rarely, discuss the culture needed to support the organization’s strategy.

Some ways to do that:
Set the tone
Check your board composition, diversity, and culture. Are you setting an example for management to follow? How often do you discuss board culture? How are you supporting management to mirror the same? You cannot ask management to model behavior you do not live by. Modeling that required behaviour is the responsibility of all members.

Understand human psychological development needs and be ready to evolve with the times as a board.
Every board member operates differently. That difference is situated where they are as a person as determined by their needs. As the external environment changes the internal capacity of everyone adjusts and responds accordingly. The leaders’ culture is seen in the organization’s culture. The desired culture of the organization optimally must align with the leader’s culture. As the environment evolves the culture must also evolve.

Talk about culture
Support executives to understand, position, and communicate the culture of the organization to employees. As Board members, our job is to partner with executives to reduce or eliminate risks by encouraging the adoption of the organizational desired culture. Most importantly communication should come along with incentives for employees to adopt the desired culture

Find ways to measure culture to help you manage risks
Culture surveys including direct and indirect metrics should be deduced from management to measure progress towards the realization of the desired culture. This is meant to assure employees full circle satisfaction with the kind of culture they see and live by.
To manage risk effectively Board members cannot de-prioritize culture. If we don’t align culture to strategy execution, we are inviting a barrage of risks we will find difficult to support/partner management to get around. COVID 19 taught us more than once that we cannot afford that. As we evolve our strategy in these changing times, we should always ask the question: how that strategy strengthens or undercut our desired culture.

At Nimdier we provide board culture transformation programs to improve board culture.
Photo credit: Valentín Betancur

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