Lessons Learned From a Board Culture Transformation

Reprinted with permission from the National Association of Corporate Directors after originally appearing as a Directorship online article on November 7, 2024.

Board culture is a critical, elusive element that is hard to define and fundamental to governance and decision-making. Simply put, the dynamic between board members impacts how decisions are made. This makes it essential for board chairs and members to pay attention to their culture and to manage it as an asset with the potential to either enhance or upend the board’s ability to work together effectively.

In an ideal world, a board’s collective decisions consistently reflect the shared values and strategic objectives of the organization. The individuals who come together share ideas and reach consensus in a manner that makes their collective contribution greater than the sum of their individual insights. Thus, the culture of the board is at the heart of the value that it can bring to an organization. In a boardroom that is thriving, however, the idea of a board culture is presumed to be a positive one and thus likely never considered or addressed.

Decades of advising boards on culture transformations have uncovered essential lessons for fostering a productive and inclusive board culture along with strategies for improvement.

Assess Current and Desired Board Culture

Culture at the board level is a fundamental set of shared agreements on how experts and advisors can bring their collective points of view and operate in a way that transcends the sum of their parts.

The journey of transforming a board’s culture begins with an honest assessment: What words do board members use to describe the culture today? What words do they use to describe the culture that they would like to have in the future? These conversations are crucial and should be a collaborative effort involving various stakeholders, such as the CEO, board leaders, and other board members.

Weak relationships among board members can result in a culture that feels neglected. Strong relationships within the board are crucial to effective decision-making, particularly when interactions are infrequent.

We noted in our consultant experience—and many directors observed—challenges to their board culture as they transitioned to virtual meetings, as necessitated by the pandemic. Some of these boards still have directors who report feeling less connected to their leadership teams as virtual meetings have persisted. While virtual meetings may be an important part of a board’s calendar, the boards that are most effective proactively address the downsides of this choice in service of relationship building, culture, and overall effectiveness.

Build a Dynamic for Effective Decision-Making

Ultimately, the board aims to create a dynamic that facilitates good decision-making despite limited interactions. This requires a conscious effort to strengthen relationships and build trust among board members. Consider whether there is one dominant tone, style of presenting, or type of board member who monopolizes the conversation. This personality interplay can significantly impact how the team works together and how inclusive the board is.

Benchmarking against industry standards and best practices, such as Russell Reynolds Associates’ 7+2 Model for Highly Effective Boards framework, provides valuable insights. These benchmarks help identify gaps and set realistic goals for cultural transformation.

A board culture that encourages diverse perspectives and inclusive dialogue is more likely to make well-rounded decisions that benefit the organization as a whole. It is important to recognize and address any imbalances in participation and influence within the boardroom.

Align Board Culture With Organizational Goals

Board culture doesn't necessarily need to align perfectly with company culture, but it should enhance and support the organization's goals. If an organization is striving to build a more inclusive company, this should be reflected in its board's composition and culture. Diversity on the board can bring varied perspectives and innovative ideas that drive the organization forward.

If there is a directional shift leaders aim to make within the company, ensure that the board is moving in the same direction. A board that is aligned with the organization's strategic goals is better positioned to provide effective oversight and guidance.

Strategies to Enhance Board Culture

To build a productive and inclusive board culture, consider the following strategies:

• Facilitate open dialogue. Encourage open and honest communication among board members. Create a safe space where everyone feels comfortable sharing their views and opinions.
• Set clear expectations. Define clear roles and responsibilities for board members. Establish guidelines for participation, decision-making, and accountability.
• Strengthen relationships. Invest time in building strong relationships among board members. Consider team-building activities, retreats, and informal gatherings to foster camaraderie and trust.
• Promote diversity. Actively seek to diversify the board in terms of skills, backgrounds, and perspectives. Diverse boards are more innovative and better equipped to address complex challenges.
• Foster inclusivity. Ensure that all board members have an equal opportunity to contribute. Address any imbalances in participation and create an inclusive environment.

Culture should be viewed as a unique asset that brings advantages to the organization at every level, including at the board level. Building an effective board culture is an ongoing process that requires intentional effort and commitment. By understanding the board's history, fostering strong relationships, promoting diversity, and aligning with organizational goals, directors can create a dynamic and inclusive boardroom that drives the organization forward.

Russell Reynolds Associates is a NACD strategic content partner, providing directors with critical and timely information, and perspectives. Russell Reynolds Associates is a financial supporter of the NACD.

Authors

Rich Fields is the global leader of the Board Effectiveness Practice at Russell Reynolds Associates.
Clare Metcalf is colead for the Americas region at Russell Reynolds Associates. She is a member of the firm's Board & CEO Advisory team, leading the recruitment and succession planning for board directors, as well as a member of the Financial Officers Practice, where she leads Fortune 500 chief financial officer searches and succession projects across sectors.
Gretchen Anderson is the global lead of the culture capability at Russell Reynolds Associates. She is coauthor of The Critical Few: Energize Your Company by Choosing What Really Matters.