Board Evolution: The importance of business culture

At Berwick Partners we have recently undertaken a research project looking at ‘Board Evolution’. From our conversations with numerous CEOs, NEDs and Chairs, we have been able to highlight five areas which will be critical to the evolution of boards as we move out of the COVID-19 crisis: board structure, the importance of business culture, a focus on diversity & inclusion, the need for strong communication and the growing pressures of ESG and sustainability. Here we look at the importance of business culture…

Intro

The Cambridge Institute for Risk Studies identified that companies with a trusting, open, and collaborative culture outperformed those with a command-and-control approach during the pandemic. Yet the challenges of the Coronavirus pandemic and the adoption of remote working has made it harder for companies to maintain a strong sense of company culture. The ability for Boards to build and sustain a strong culture is a real challenge for the future; the need for openness and trust between the Board and the rest of the business was highlighted as a priority through our research.

Our research found that there was an increased desire for the executive to embody the values and behaviours of the company and display more empathy and authentic leadership. Non-Execs too need to get closer to the business to understand the key issues and support the executive and their welfare.

Creating an open, transparent, culture where employees are empowered to share ideas, and a more human leadership style adopted was likely to result in better overall performance – both from individuals and the business as a whole.

What the leaders had to say…

In terms of social impact, the pandemic has made organisations ask themselves: how are we taking care of our staff, how are we looking out for our customers, how are our suppliers looking after their people? If you have good governance in your business, these important issues will be addressed in the right way. I think you can have a ‘leadership culture’ that asks the questions about all the seasons – being honest about the skills you have around the leadership table and where you need support from external advisors.

Rob Fenwick, Chief Risk Officer, Howdens Plc

Having the values of fairness and honesty are essential – you need to treat everyone the same and be transparent with your decisions. Integrity, to me, is the most valuable trait that I would seek. It is so important for the rest of the board and the organisation as a whole to have that trust in their leadership. Ensuring that there is trust and respect around the boardroom table, and that everyone has the same objective, enables the relationship across the leadership group to be effective.

Tim Cooper, NED, Renold Plc & Pressure Technologies Plc

With a significant shift towards remote working, there is a real need for managers throughout an organisation to develop a culture of trust. Whilst an organisation can address the equipment requirements with relative ease, it’s the softer skills required by leaders to create this empowering and outcome-based culture and approach.

Malcolm Harrison, CEO CIPS

CEO’s and leaders have an opportunity to reset the culture of almost all businesses to be fit for the future. Really drive a people centric focus – both employees and customer. How do we invest in our people, rather than dividend? In some instances, there has been a swagger about some leaders who are expected to know things, acting as if they do. COVID has levelled us, hence we need wider collaboration to drive ‘empathy’ and a real humble awareness of the needs of people, as a key enabler to driving high performance. High EQ, servant-leader.

Peter Thomas – Interim SME CEO & Board Advisor

There must be trust across all communities, so that in crisis the NED’s can step back to give the Exec space to deliver and room to ask for help/ forgiveness. This cleared decks quickly.

People constantly look at leaders – you may not yet know the way out of a swamp, but you need them to believe you will find the way. Behaviours and integrity are critical.

Harry Reilly – Chairman, multiple Chair & NED

Transparency is key to a board’s success.

Mike Karim, CEO, Oxford Endovascular