The Impact of Board Culture on Organizational Performance

Board culture and organizational performance are deeply tied to each other. It isn’t hard to understand that what board members do at the higher end of the hierarchy passes down as well. For example, the board of directors is responsible for making vital recruitments. The recruitment criteria they set at the top will be followed by the recruiters below them.

Similarly, the approach to change, adaptability, technology, and how to get things done is set by the corporate leadership. That’s why investors nowadays are more concerned about the leadership skills of the people who will handle their investments.

  • In the text to follow, you will be able to learn about:
  • The impact of board culture on organizational performance
  • How to create a strong board culture, and
  • How board technologies like board portal software can play an important role in better board governance

The impact of board culture on organizational performance

A strong, clear, inquisitive, and appreciative board culture has a direct impact on employees in the organization. It helps keep employees motivated and more engaged. Here is how it can affect organizational performance.

  1. Better employee motivation. Higher employee motivation leads to a stronger commitment to organizational standards of excellence and quality. It allows employees to be able to think smarter, pay more attention to minute details, and be creative in getting the job done.

  2. Greater employee satisfaction. A great corporate culture always promotes work-life balance. Such organizations focus on getting the job done instead of how employees do it. It allows employees to work smarter rather than harder and be able to maintain their personal life and work.

  3. A balanced personal and professional life leads to higher satisfaction (51% people worldwide consider work-life balance as an important organizational attribute), thus producing better results for the company.

  4. Higher employee retention. Higher employee retention is one of the biggest benefits of nurturing a powerful organizational culture. When employees are heard, appreciated, and allowed to grow, they don’t really have a reason to leave.

  5. Profitability. It isn’t hard to understand that satisfied and motivated employees are highly productive. When everyone gets their job done with passion, it collectively affects organizational performance in a positive way, thus increasing corporate profits.

How to develop a great board culture?

To solve a problem, it is important to recognize it first. Corporate boards can only develop a strong culture by acknowledging its importance in the first place. Once they do it, there are tonnes of case studies and guidelines (such as Robert’s Rules) to make it happen,” says  Jesus Rivas, Marketing Strategist at https://board-room.org/.

Robert’s Rules are comprehensive guidelines on how to conduct meetings and discussions in committees, board meetings, etc. Check out a Robert’s Rules cheat sheet to get a basic idea of how it works.

Here is how boards can develop a strong culture:

  • Creating a strong board culture always starts with an idea and putting it into action. The board should show the desired culture through its actions, not just words. Teamwork is important, but combining it with a strong culture makes a board even more effective, as their authority comes from united decision-making.

  • Organizational changes, especially in leadership, may quickly reshape the organizational culture in a negative way. It is important to address ethical concerns immediately, as unchecked issues related to culture may promote rebellion in the future. For example, in the case of an M&A, the new leadership must immediately address the issues arising and reinforce their corporate values.

  • An organizational board might believe that its internal cultural perspective is solid, but it is vital to assess whether this culture boasts the same strength and visibility in its external image.

How can a virtual boardroom improve corporate governance?

Virtual boardroom or board portal software is a digital board management platform that addresses multiple board processes like board communication, online meetings, and board document management.

 

Here is why board portals are game changers in modern-day corporate governance.

  1. Better connectivity between board members. It goes without saying that a cohesive board will lead to better management decisions. Virtual boardroom software connects board members in a much better way. That said, the boardroom is an all-in-one platform where board members can share ideas, give inputs on motions raised, share documents, arrange meetings, cast votes, and even directly communicate with investors.

  2. Faster and informed decisions. Organizations don’t have to wait for traditional board meetings in order to discuss important affairs. Board portals allow the leadership to discuss urgent matters on short notice. They can easily arrange emergency meetings within the boardroom. Organizers can instantly prepare meeting agenda and circulate it to participants. There is no need for any external application if you have reliable board software.

  3. Digital protection. Last but not least, board portals are certified digital board management platforms; boards can trust them with their confidential data. Globally recognized board portals are mostly ISO, FINRA, GDPR, FISMA, and HIPAA-certified.

Final words

Board culture directly affects organizational performance. An appreciative and motivating atmosphere in an organization will attract the best talent, keep them engaged and motivated, and retention rates will be higher as well. It also plays an important role in change management and adapting to modern-day work practices.

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