Just the title of this article makes governance experts recoil. Boards have always been advised to stay out of organizational management and that includes human resources issues. Yet, as organizational culture continues to emerge as critical to organizational performance, boards are finding themselves having to engage in some non-traditional behavior.
Boards in today’s world are expected to work with the CEO to define the organizational culture expected and the measures that will assure adherence to the values. In October, the corporate consulting firm KPMG issued a report called “OnRisk 2020: A guide to understanding, aligning and optimizing risk”. The report included “talent and culture” as risks of which the board should become more aware.
More and more boards are holding CEOs responsible for leadership development and succession programs, tracking regular measurements of employee engagement and innovation and conducting regular outside reviews of human resources policies, pay and compliance.
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