Today, I am hosting a Guest Post by Elliot Schreiber, PhD. I have a few comments at the end.
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Boards have responsibility for approving the strategy and risk appetite of the company. This requires directors to have sufficient information to assure themselves that they can make the best decisions possible at the time the decision is needed.
Those who follow business literature know that there has been an increase in focus on culture, and how to create a “healthy” environment in which employees feel respected and are engaged in creating value for all stakeholders. This is not a search for “feel good” environments. Healthy cultures create greater financial success over the long-term. Conversely, an unhealthy culture, one that is authoritarian, puts the organization at risk. However, boards have not focused on organizational culture, seeing it as an operational, management responsibility. But before focusing on culture, boards need to work with the CEO to ensure that the right values are embedded in the organization.
What do we do, though, if the CEO is the problem, fostering values and culture that are unhealthy and create unnecessary risks. This has been the case in more than 70% of the corporate crises in recent years. Wells…
