Why Your Board Might Be Great—But Totally Wrong For Your Company

By Darren Rawson

Darren Rawson is the chair of five private companies including AltaML and Chandos Construction. He’s a former CEO of three different private companies and has done business internationally for over 25 years in numerous industry sectors.

I once worked with a board that, on the surface, looked nearly perfect.

They were outstanding on fiduciary oversight, financially savvy, and full of operational leaders who brought rigor and accountability. The board was well-prepared, thorough, and asked great questions… great questions about operations.

But unfortunately there was a problem. We realized it was the wrong board. 

While the board was incredibly capable, it was the wrong board for the organization. Not because they lacked skills—but because they had the wrong mindset.

This board focused on preserving value. The shareholder wanted to create it. 

The shareholder, having bought the business from a trust, had an extremely high risk appetite. They wanted growth, innovation and bold moves. The board didn’t match this direction of the company, and the disconnect all came down to culture. 

Does your board have a culture? We believe the answer is always yes. That culture will either emerge or it will be intentionally selected and shaped.

Very few boards have conversations defining their desired culture. Why?

What is Culture?

Culture is your organization’s (or board’s) personality. It’s the way it thinks, talks, and makes decisions.

In the Harvard Business Review (HBR), The Leader’s Guide to Corporate Culture article defines culture as “the tacit social order of an organization”. In other words, culture is how things really work behind the scenes. The article stated further that culture “shapes attitudes and behaviors in wide-ranging and durable ways.”

As Mary Jordan says “There is no such thing as good or bad culture. There is only a culture that supports a strategy and one that does not.” While this quote would be targeted to organizations, it equally applies to boards.

A board does not have to pick a culture. However, a board that intentionally selects a desired board culture based on the goals of the shareholders and the strategy of the business will be more effective and create more value.

Common Board Cultures (And Why It Matters)

There are numerous articles and models discussing how to describe culture. Andy Freire describes five archetypes of culture: (1) Achievement, (2) Innovation, (3) One-Team, (4) People-First, and (5) Customer-Focused. In the HBR article mentioned above, there are eight culture types explored and mapped onto the below grid.

Culture Archetypes Matrix (The Leaders Guide to Corporate Culture, HBR)

Cultural Dimensions of Leadership

Here’s the key: No one type of culture is best. But only one will be best for what the organization needs at the time.

For example, if you are on the board of a technology company with a high risk appetite and high growth culture, a Results or Authority culture may not be as appropriate as a Learning or Purpose culture.

Applying Culture to Your Board

The first best step for understanding your board culture is to have the conversation. Discuss the strategy of the organization and the ambitions of the shareholders. Attempt to put words or language to define your desired board culture. Models like the ones mentioned above could be useful, but do not lock yourself in. Be as creative as required to ensure both the board and management have clarity on the desired board culture.

Next, look at the design of your board and ask yourself if the design supports this structure? In a previous article we introduced our High-Performing Board model. The structure, processes, people and conversations can and should be intentionally shaped to reinforce your board culture. The “As Is” or current state is not wrong and you should not rush to change your board. However, you should plan a migration towards your “To Be” state with your desired culture. This could result in changes to the structure (more or less rigorous), changes to the processes (more or less rigorous), changes to the people or board composition, and changes to how you conduct meetings and debate as a board.

Lastly, consider drafting Rules of Engagement, as outlined in a prior article. Rules of Engagement should be established after you define your desired board culture. As mentioned, culture is a set of behavioural norms for your board, and the Rules of Engagement should establish the norms that support the board culture.

In Summary: Culture is the Key to a High-Performing Board

The board’s culture may not match the organization's culture. That’s okay. In fact, it’s often necessary. But the board's culture does need to support the company’s purpose and the shareholder’s vision. 

When culture is clear, the board becomes more than a group of experts. Intentionally defining and shaping your board culture is a strong move towards having a high-performing board that creates value.