How existing company culture can get in the way of the organisation of the future14 June 2022
An inclusive and diverse boardroom. It is an absolute must for the organisation of the future. But, renewing the composition of a board and allowing ‘new school’ board members to be a part of it, is quite a task. Not just when it comes to hiring the right profiles, but mainly when it comes to offering enough room for fresh perspectives.
Need for a new generation in the boardroom
There is a huge need for a new generation of leaders in the boardroom. This is the only way in which the organisation (and its goals) as well as society are reflected on a board level. It also means that actual issues can be tackled.
Yet, in many Dutch boardrooms, older, conservative leaders preside. They are selected mainly because of their years of managerial experience. Exaggeratedly speaking, they mostly focus on company achievements, finances and an efficient way of running the company. Their performance is judged based on profit, revenue and the rate of return.The ‘hard controls’. This makes sense given that this is also what an organisation is held accountable for.
Room for societal issues
There is not a lot of room for societal issues in modern organisations. ‘Soft controls’ like climate goals, running your enterprise in a responsible way and sustainability are all barely talked about in the boardroom. And, if they are, often these discussions don’t result in a lot of action.
Soft controls mostly pertain to an organisation and its environment’s norms and values. These, in turn, influence employees’ motivation levels, loyalty and how inspired they are by other employees. This is also something that organisations are held accountable for.
In the Netherlands, there is not a lot of room for measuring, guiding or mastering achievements using soft controls yet. To achieve this, it is a good idea for “old school” board members to come into contact with “new school” board members: the younger generation of leaders.
Be open to new cultures of governance
Above is something that definitely doesn’t always happen. Many board rooms keep risks down to a minimum and are hesitant to go in a different direction. If they do allow different, new board profiles to come in, often with a set of skills for soft controls, we see that these start to adapt to existing governance culture both consciously and subconsciously, within some time of being there. This means that yes, perhaps diversity in the boardroom has increased, but inclusivity still decreases because these subjects are still not done justice.
In practice, we see a variety of examples of ‘rebellious’ women with an innovative profile and an innovative vision, who still conform to existing, old-fashioned governance culture within a year. To give the necessary diversity and inclusion a chance, it is vital that a boardroom is open to new governance norms and cultures.
Make the culture of governance something that can be openly discussed
Whoever is in the boardroom, there should always be a space to openly discuss the culture. New members need to be given the space to be heard. In an ideal situation, every member is constantly evaluated and coached on their position and ideally, there is room for new members of the board to be daring and have guts. Feedback would happen immediately instead of only in formalised moments and in this feedback, you would look at whether everyone’s authenticity is preserved.
New members need to utilise said space well. They need to be confident in their convictions. A new perspective, a proactive attitude, an endless supply of ideas and a healthy dose of motivation.
New school board members
If it is so important to have diversity in the boardroom, how is the ideal composition of board members achieved? A common pitfall is that organisations look for ‘all the diversity’ in one single person. Limit yourself to profiles with specific traits and expertises. Managerial experience is not a must in this. It is mainly important to ensure that different perspectives are brought to the table.
Hanneke Rinkes, Managing Director Newpeople
Publication Management Impact