What Boards Should Know About Culture

“Culture” is important to performance, but how much can boards really know about a company’s culture? And can they impact culture? And should they?

Why Boards Should Care

Boards should care about company culture because good cultures outperform bad ones. Full stop.

Boards always want strong performance, yet surprisingly few pay close attention to culture. Isn't that crazy?

Consider research cited by Denise Yohn in “Culture Oversight — A Mandate For Boards of Directors." According to the Financial Reporting Council in the UK, only 1 in 24 executives report that culture regularly appears on board agendas.

Perhaps this gap in oversight explains why regulatory bodies have stepped in. The UK’s Corporate Governance Code now explicitly requires boards to “establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned.”

Yet without regulatory mandates—particularly in the U.S. and for unregulated mid-sized companies—the proven correlation between culture and performance alone should compel boards everywhere to take culture seriously.

Why It Seems Hard To Gauge Culture (But Isn’t)

The reason why culture is so rarely examined is because it seems hard to define and inspect.

Every board deck presents the company’s financials, sales forecasts, and other operational metrics; all of which are instantly decoded and understood around the table. This is the language of boards. If "culture" or something else is messed up, board members presume the effects will travel downstream and eventually hit the key metrics.

But why in the world are boards willing to let a culture collapse surprise them?

“Culture” seems hard to define and measure, like some kind of subjective magic trick — but it’s really not.

To simplify, rely on what I call the Leo Tolstoy Rule; as Tolstoy observes in Anna Karenia’s opening line:

Happy families are all alike; every unhappy family is unhappy in its own way.

Maybe you get marbles in your mouth when trying to explain or understand “culture.”

I’m here to comfort you. It’s simple.

Every great culture is the same.

And easy to spot. And easy to measure.

Good, high performing cultures do not fumble around with hot air platitudes like “people first” and “work life balance.”

Happy, high performing cultures simply obsess about their shared fate.

They are crystal clear on the vision, behaviors, and plan, and aligned and foaming out of the mouth to achieve those together.

That’s it.

In fact, consider the UK's definition above of culture and the board's role. It’s almost perfect: “establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned.”

Since a board’s window into the company is its CEO, boards should ask themselves these two simple questions.

1. Can the CEO articulate the vision, values, and strategic plan simply and concretely, ideally in 10 words or less?
2. Does she do it constantly?

If you — the board member — cannot regurgitate this yourself, then open your eyes wide!

The team probably can’t either.

And all happy, high profile cultures are alike.

What Boards Should Hear About Culture

While CEO at Levelset, a Procore Company , culture was important to me, and that was evident to our board because of how I reported on it.

I didn’t simply drop a comment in my updates that “moral is good.”

No! At nearly all board interactions the People Operations leader sat at my side. We reported and talked about culture in tangible ways. We constantly showed the board and the internal leadership that we paid attention to culture, and importantly, that it was a board level priority at all times.

Here are some examples:

• People Operations leader always present and active participant in board agendas and discussions.
• Board decks and agendas had space to review engagement metrics (which, of course, were tracked in real time), internal promotions, retention metrics.
• Glassdoor reviews (good and bad), and other employee comments and stories, shared and discussed.
• Surveyed board members to discus plan, values, mission, and culture, asking questions like, “what does the mission mean to you?”

Every company will not be a top 5% or 20% cultural juggernaut. But boards that expect high performance aught to expect good, above-average culture. And the higher the better!

Plus, culture observations can be a true canary in the coal mine for boards.

Boards should not leave culture insights under the hood. They should expect insight, and can specifically ask for it. In doing so, boards should look for two key things:

1. Tangible Team and Engagement Metrics that are measured and reported consistently, just like sales and financial reports;
2. People Ops presence — so boards hear from the horse’s mouth.

Consequences of Ignoring Culture

Culture insights are an interesting topic for CEOs and boards because, on the one hand, it presents an upstream opportunity to gauge and strengthen performance, but on the other hand, it calls forth a possible responsibility that can have messy consequences.

The Tolstoy Rule comes back here for the opposite reason.

Instead of highlighting how easy it is to spot a good culture, here it warns that bad cultures are bad for a million different reasons; and some of those reasons are very bad.

What is a board’s responsibility for a company’s bad culture?

Just last week, Rippling filed a lawsuit against Deel for unfair trade practices that implicates senior leadership and, possibly, board activity. This is a much better culture story for Rippling than the company experienced in its early innings as Zenefits, which of course, is a case study in bad culture! And any marketplace observer can rattle off examples of culture destroying company value, like Wells Fargo’s ethics scandal, Uber’s culture crisis, and the Boeing 737 Max failings.

The point is that things can get real sticky for boards.

A board’s legal culpability and responsibility here is a difficult question with moving targets and competing arguments.

But exact liability issues aside, boards definitely want to avoid bad circumstances, because it’s just bad business!

Culture Signals Boards Should Watch

I was on the board of a company who had the bottom suddenly fall out.

Circumstances soured very fast, and the board saw company operations first hand. It was not pretty. Red flags began to hit us over the head.

And then, we did something simple — we noticed the company’s Glassdoor reviews. All the red flags were right there in black and white. We could’ve read them at any time.

Now, of course, anonymous employee feedback on channels like Glassdoor must be ingested with caution and context. Good reviews can be faked. Bad reviews can come from bitter and unfair circumstances where there are two sides to the story.

Nevertheless, these review platforms can be useful data points, and part of a broader story that boards can observe about their companies.

Other places to look include:

• Employee turnover metrics
• Internal promotions of key leadership positions
• Tenure of senior team members and retention overall
• Net promotor scores
• Speed that open roles are filled
• How often employees share or comment on social media posts
• Exit interviews on leadership turnover

One of Levelset’s board members, Ho Nam , used to comment that “employees vote with their feet.”

This is wise, and I think it can be extended to “employees vote with their enthusiasm.”

To peer into a company’s culture, boards should seek to gauge employee enthusiasm.

Ideally, the CEO and people leader is reporting on it. But, if not, there are tea leaves all over the place, and boards should pay close attention to them.

How Boards Can Impact & Help Culture

I believe boards can be an incredible fulcrum for leaders to reinforce and strengthen culture.

The board structure is so familiar to CEOs and Directors that they forget how unfamiliar everyone else is with it.

But the “board” is a big, mysterious, black box of a thing for most people.?

And if there’s one thing that groups don’t manage well…

It used to surprise me when, after a board meeting, team members and leaders would rush up to me and ask “what did the board say?”

The tone wasn’t filled with curiosity. There was more tension and turbulence in it than that.

I eventually noticed the huge information gap about boards. Let's call it the Board Mystery Gap.

This gap creates a cultural headwind that grows stronger as the organization grows.

Can you flip the effect?

By closing the Board Mystery Gap, can you turn the board into a cultural tailwind?

By frequently exposing the team to the board and the board to the team, the Board Mystery Gap closes, and boards can help their company’s culture, and help by a lot.

Here are some examples of what we did at Levelset.

1. Always Share Board Materials

Immediately after every board meeting, call, or email update, I would share the written materials to the entire team. This was not just a post somewhere in the dark corners of our intranet. I affirmatively shared it.

Of course, we removed sensitive items that needed privacy or confidentiality; but it wasn’t much.

This invited the entire team into the board relationship.

Not only did it close the Board Mystery Gap, but it also helped the team better understand our business and strategic plan.

And — bonus! — it became another way to manage the team.

This effect reminds me of what Bob Iger described as “management by press release.” In his book Ride of a Lifetime, he explains:

Hearing it communicated broadly, particularly to investors, and witnessing the reaction to it, fueled everyone with the energy and commitment to move forward…There were now expectations that we had to live up to. That meant added pressure, but it also gave me a powerful communications tool within the company…

In big, publicly traded companies, you can “manage by press release” like Bob Iger. In private companies, board communications can have the same effect.

2. Invite, Invite, Invite

It’s common — and mostly well adopted — advice to invite and leverage key leaders in board sessions.

Consider going even further.

We’d always pull a person or two from the ranks and let them join and observe board meeting.

This reduced the Board Mystery Gap, enabled context to spread into the team, and because an important personal development opportunity for the observer.

3. Let Boards Into Operations!

What about the other way around — bringing board members into operational meetings?

Harvard Business Review profiled this in How Netflix Redesigned Board Meetings.

At Netflix, board members periodically attended (as an observer) recurring senior leadership meetings. I like this idea.

We didn’t do this as programmatically as Netflix, but we did weave board members into operations more ad hoc. I’d frequently set up 1:1 meetings between team members and board directors with applicable experience to a project or role.

We also had working sessions with board members and advisors who had great operational experience. For example, we had some amazing marketing and communication sessions with advisor Chip Heath .? And likewise, fintech operational work done with Karla Friede and Michael Gollner . ?

This provided amazing value to the team members involved. The direct impact helped the underlying project. The indirect impact closed the Board Mystery Gap.

4. Socialize!

Put the board and team into social settings as often as possible, letting the context cross-pollination happen naturally.

If possible, every board meeting should be paired with a board dinner or other social engagement. And keep that audience wide. Dinners can’t become parties and events, of course, so headcount must be reasonable. But be liberal. Mix the audience around.

And do host events, too.

At a company where I sat on the board, we held a happy hour with the team and it was a big cultural success for them. At Levelset, we invited board members to holiday parties, happy hours, and other full-team events, bringing positive effects every time.

5. Town Halls With The Board

Companies frequently host AMAs and Town Halls with the CEO and other leadership…consider doing it with the board, too. Again, this gives both sides valuable context.

We did this at Levelset and it was one of our best AMA sessions ever.

No moderating the questions and sanitizing the thing. No fearful restrictions. Just get the CEO and the Board on the Zoom and let it rip. If there are bad and uncomfortable topics…trust me, they aren’t getting better under the rug.

6. Get and Advertise The Board Members’ Point of View

Each board member is part of the business for a reason. There is some reason why they believe in the enterprise. Some reason why they are involved.

These reasons are actually quite good and more pronounced than even other executives and leaders. Their connection to the business may actually rhyme more with the Founder or CEO’s impulses, because, after all, it's usually quite an intentional or focused effort for a board member to get involved with a business.

Companies should use that!

I would survey the board each year and ask them questions like, "What does Levelset’s mission mean to you?”

Their answers were amazing. And, more importantly, authentic.

I’d reflect these answers right back to them. Literally, sticking their own quotes in the board deck to frame the start of our meetings. And I’d also incorporate the comments into all-hands meetings with the full team or executive team, helping to reinforce our vision and culture.

Boards Really Can Impact Culture

Is your board too removed from the broader team? Be careful. This is not a “culture neutral” situation. The Board Mystery Gap may be a culture headwind.

Leaders and boards that work together can thoughtfully close the mystery gap and create (1) boards with more business context and (2) teams with more board context. This helps on multiple fronts.

Boards That Care About Performance Care About Culture

Happy, high performing companies are all alike.

Great boards care about culture because happy, aligned teams deliver sustainable performance.

They demand visibility into culture just as they demand financial data or strategic plans. They don’t wait for culture problems to surface; they actively look for evidence of employee enthusiasm and engagement. Most importantly, great boards help close the information gap—ensuring clarity flows not only from leadership to teams but also back up to the boardroom.