Boards Struggle With Culture Metrics
Agenda published the article, "Boards Struggle With Culture Metrics," that quoted Russell Reynolds Associates Consultant Anthony Goodman and featured our paper, "Corporate Culture: Is Your Board Accountable?" The article is excerpted below.
As boards grow increasingly aware of the importance of gauging and understanding company culture, directors are working with management teams to determine which data points can best unearth and root out culture problems before they can fester and thwart strategic initiatives.
Recent research published by Russell Reynolds Associates identifies at least 30 credible culture metrics that can be used in dashboards, such as hotline complaints, internal upward advancements, flagged pulse survey comments and exit interview summaries. However, boards — in collaboration with chief human resources officers and other senior executives — are digging deeper to determine which metrics will be the most meaningful to their specific companies. They are also pairing culture dashboards and reports with in-person observations by board members derived from visits to locations outside headquarters, investor day meetings and interaction with key employees.
Anthony Goodman, managing director at Russell Reynolds and a co-author of the firm’s recent report, points out that investors, and in particular State Street Global Advisors, have focused on board oversight of culture. SSGA is often “two steps ahead” in terms of the issues the firm raises for board engagement focus, and more investors will likely follow suit in 2020.
“This is a softer topic that is harder to define, and there aren’t as many agreed-upon metrics that you can look at,” says Goodman. “Boards are hearing all these questions being asked of them and are, naturally, responding by saying, ‘OK, if I do want to go down this road, what do I do?’”
Goodman estimates that over the next 12 to 18 months, more oversight practices are likely to emerge as boards hash out the topic in committee and potentially full board meetings.
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