The Board and Organizational Culture

by Les Wallace, Ph.D

At what level should directors be involved in developing employee engagement?

We are taught as board members to stay focused on policy and strategy governance and not stray below the line into managerial issues. For many board members, the biggest challenge of this guidance surfaces around the issue of corporate culture and employee engagement. Every business desires to be a best place to work; many credit unions have that goal in their strategic plans. Yet, at what level does a board get involved in this? What sentinel metrics should a board reasonably track to ensure the CEO is delivering on your expectation? What’s a board to do when the metrics don’t stack up? Let’s explore these questions to help point your board’s behavior in the right direction.

Can board members legitimately define the corporate culture they expect?

Yes they can, and should. Setting “values” for how the organization behaves is a typical part of setting a mission, vision and strategy. It is possible to define the values of a high-performing and humane business culture without micromanaging the CEO. It’s also possible to have hard data and survey measures of how well the organization walks the talk on the values. The organizational performance research literature tells us that, when customer performance starts to decline, it’s likely employee engagement has been in decline for some time. A board can stay on top of this leading indicator—how’s your culture?

What and how should metrics be tracked?

The traditional industrial model is to conduct a climate survey, sometimes also known as an opinion survey, once a year. These surveys typically try to affirm there is a climate of trust, integrity, respect, valuing input, coaching and development, and open communication in the workplace everyday.

As the concept of measuring “employee engagement” has overtaken the old “satisfaction” survey approach, high-performance organizations expect to measure engagement as proof that employees see visible signs of the expected cultural values at work. National and international organizations, such as Gallup and BlessingWhite, have generated substantial research on the value of sustaining a culture of high employee engagement. For example, it’s widely proven that a highly engaged workforce can outperform a less engaged organization by 20 percent—many studies say up to 40 percent.

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