Spencer Stuart: What Do Boards Need to Know About Corporate Culture?

One lever of performance that rarely appears on a board’s agenda is culture. Spencer Stuart finds very few boards put equal focus on culture as they do strategy, risk or CEO succession planning. Culture has the power to make or break business strategy and even the most experienced executive. Boards can enhance their understanding of culture to improve company culture and foster long-term shareholder value.

The following is an excerpt from the article: “Consider the example of a private-equity-backed global manufacturer of specialized consumer products. Two years into the firm’s five-year investment, the company was plagued by stagnant performance and an uncertain identity and struggled with a leadership transition. Although the company strategy emphasized growth through product innovation, our assessment revealed that the company had a culture built around results and stability, more in keeping with a sales and distribution company than an innovative products company. By fine-tuning the strategy, reassigning a few executives as part of a larger organizational restructuring, and promoting a culture that emphasized learning and experimentation, the company got back on track.”

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