Board Culture: An Action Plan to Drive Performance

Despite decades of attention, many directors still associate board culture with soft skills, and discussions about board culture often include terms such as candor, courage, and trust. But this is just one aspect of board culture. NACD’s recent Blue Ribbon Commission report, Culture as the Foundation: Building a High-Performance Board, sees board culture more like software that drives performance.

While acknowledging the importance of personal character traits, our commission defined board culture as the “shared values, beliefs, assumptions, experiences, and expectations that influence behavior in the boardroom and manifest themselves in board norms, protocols, and practices.” How, then, to upgrade board culture so that boards perform well and enhance company performance? The commissioners agreed on three main steps:

• First, the board needs to define its optimal board culture. To do this, the board needs to assess the current board culture and intentionally define the desired state. This begins with candid conversation about the kind of culture they want.

• Next, the board will need to reinforce its desired board culture and behavioral norms. This means clarifying the roles and responsibilities of the designated board leaders in this regard and giving the nominating and governance committee ownership of board culture-related processes and practices.

• Finally, as part of these steps, the board should address major cultural fault lines. This means recognizing and addressing unhealthy behaviors and group and individual dynamics—including problematic directors, such as board members who are disengaged.

A strong board culture does not require dramatic, far-reaching change, but it does require active investment, leadership, and a willingness to create discomfort, including the courage to address unwanted behaviors. While often overlooked, the board’s shared norms, protocols, and practices influence each interaction, discussion, and decision—and the board’s ultimate success. If the board defines and nurtures its desired culture, board performance—and company performance—will be the better for it. ■