Board’s responsibility for company culture: Is it a Myth or necessity?
I sat in a boardroom of a hospitality industry company that had just lost its top three executives. They had all resigned within months of each other. The chairman, frustrated, said, “We are offering market salaries. Why are people leaving?†The board blamed HR, HR blamed the CEO, the CEO blamed the toxic work environment, and, of course, no one wanted to own the problem.
This is the usual script.
Boards want to believe that company culture is a management issue, something for the CEO to fix. But let me tell you the inconvenient truth, culture is a direct reflection of governance. If a company’s culture stinks, the boardroom isn’t just a spectator; it’s an accomplice.
Culture is not about free coffee
Too many executives still think culture is about office perks, motivational posters, and Friday dress-downs. Culture is how decisions are made, how conflicts are resolved, how people feel about their work, and most importantly, how leaders behave when no one is watching.
Take an agribusiness firm I once worked with. The board was obsessed with profitability, pushing the CEO to meet aggressive targets. To impress, the CEO manipulated financial reports, suppliers were squeezed beyond reason, and employees operated in fear. What happened? A whistleblower exposed the fraud, suppliers walked away, and the company collapsed under regulatory pressure. The board’s defense? “We didn’t know.†But they did. They created the pressure that drove unethical behavior.
The board sets the cultural tone
A board that ignores culture is like a captain ignoring the weather forecast. It’s not a question of if, but when disaster will strike.
"Culture isn’t just some HR sideshow, it’s a governance issue that determines whether a company thrives or self-destructs."
At a financial services firm, I challenged the board on how they made decisions. Were they rewarding short-term performance at the cost of long-term sustainability? Were they creating a culture where employees felt safe to speak up? Or was fear driving silent compliance?
It was uncomfortable. But that’s the work. If a board isn’t discussing culture, it’s already lost control of it.
Leadership challenge, owning culture at the top
Here’s the real leadership test can your board describe the company’s culture in one sentence? Not the mission statement, not the values stuck on the website. The real, on-the-ground culture. If they can’t, they aren’t leading it.
To fix this, boards must:
- a) Measure it. Conduct anonymous culture audits, exit interviews, and 360-degree reviews of leadership. Culture is measurable if you care to look.
- b) Embed it in strategy. If culture isn’t influencing board discussions on risk, performance, and leadership, then it’s just empty talk.
- c) Walk the talk. If the boardroom tolerates unethical leadership, no amount of workshops will fix the rot.
In the village, Grandpa always said, “A house falls from the roof.†If a company’s culture is toxic, start looking at the top. The board must stop pretending culture is someone else’s problem. Because if they don’t own it, they’ll eventually be the ones explaining its failure.