Maximizing the Way We Work: The Impact of Board Culture

Author:
Rebecca Miller
Theme:
Strategic Philanthropy
Thursday, August 9, 2018

Recently, we worked with a family foundation board that had just done a major revamp of its grantmaking strategy and recognized that its board culture may need to evolve alongside the strategy. They brought in TPI to help them take an honest look at their embedded ways of operating and identify how their culture could shift in ways that would support the new strategy, and help the board work better together. They found, for example, that by relying on a decision-making process that required thorough analysis and discussion at the highest level of the board, they were less prepared to make quicker decisions that would support their new, more community-driven grantmaking strategy.

Your board sets the tone and direction of the foundation, so your board’s culture will have a powerful influence throughout the foundation, and ultimately on its social impact. It will directly affect policy, practices, and behaviors not only on the board but also among staff, grantees, and other stakeholders.  In fact, there are those who think culture is THE most important success factor. Management guru Peter Drucker reportedly said, “Culture eats strategy for breakfast.”

Grantmakers for Effective Organizations (GEO) defines culture as an organization’s “personality or character.” Culture shapes the way that members of an organization think and act. It can also be invisible and unnamed, especially to those who have been part of the organization for a long time.

GEO identifies three core elements of culture that shape how a board operates and can enhance or impede a board’s work:

  1. Values – what we care about
  2. Norms – rules and supporting structures and processes that define how we live out those values
  3. Behaviors – actions taken to follow the rules

There are a number of inflection points when it is particularly useful to reflect on your foundation board’s culture:

When there is a staff leadership change, a board may want to define its own internal culture before they can effectively consider what kind of culture they would like to see supported by new staff. In some cases, they may wish to hire an Executive Director who matches how the board currently works; or they may want to pursue an ED who will bring a different culture that constructively challenges the board’s established way of working.

As in our client situation described above, it is useful to reflect on board culture when a foundation has a new strategy. Trustees could examine whether the way the board works will be conducive to effectively implementing the strategy. For example, if a board typically works quickly and wants to see immediate results, board members may want to reexamine and try to change that culture when deciding to pursue a strategy that promotes slow, deep, holistic community engagement.

Finally, board member transitions might open the door to a discussion of board culture. For example, if a founder of a family foundation passes away, it could be an opportune time to think about how that will impact the board culture, identify desired shifts, and be intentional about choosing board leadership that can implement those changes.

If you decide to assess or define your culture, there are several models that can be useful.

In “The Source Codes of Foundation Culture,” GEO lays out three types of “source codes” – each with its own benefits and drawbacks – that underpin the workings and culture of different foundations:

  1. Banks – a model in which the foundation is “serious and stately,” very well respected, has a lot of internal structure, and may lack transparency and open engagement with the community.
  2. Universities – a model in which knowledge and learning are highly valued and the institution is strong in evaluating its work, where decision-making can be slowed by a need for more and more analysis, and where there can sometimes be elitism with an emphasis on credentials rather than practical experience.
  3. For-Profit Corporations – a model that highlights discipline and good stewardship of resources, an emphasis on metrics, the challenge of oversimplification of complex issues, and a lot of autonomy granted to foundation heads.

A 2016 article “The Bedrock of Board Culture,” by the Association of Governing Boards of Universities and Colleges outlines four overlapping archetypes of board trustees, which can easily apply to a foundation’s board:

  1. Orchestra – board members are collaborative, function with collective structure, and follow clear norms and rules.
  2. Consultants – trustees operate as expert individuals, provide technical assistance, and separate out and oversee specific topics, getting the job done as a collection of individuals or committees.
  3. Regulatory Agency – the board focuses on compliance and policies, works fairly formally and bureaucratically, and pushes for consensus.
  4. Lone Rangers – trustees act with significant individuality, challenge tradition, insert themselves as they see fit, and are respectful of one another as colleagues.

While these models can be a helpful start in evaluating your board’s culture, it is difficult to be objective, thoughtful, and open to change without the guidance and objectivity of a third party. An external consultant can help your board think about such questions as:

  • Which of these models most aligns with our current board culture?
  • What are the attributes we would like to espouse in our internal culture in the future?
  • What is the external culture we hope to promote in the communities in which we work, and what kind of internal culture do we need to influence that?
  • What practices do we need to change to achieve a shift to the culture we aspire to?

From there, real change requires a deep commitment by all trustees to evolve the culture in a way that fits their vision, and discipline to adhere to the change in practices.

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