What Boards want (4): Cultural Fit

What Boards want (4): Cultural Fit

The Importance of Demonstrating Cultural Fit in the Board Appointment Process

In recent articles I have been working through the the five elements I know most Chairs or Nominations Committees consider when making board appointments including:

Today I will look at Cultural Fit. It is my hope that, by the end of this article, you will understand that this element is critical and counts for more than you might think it would in the appointment process.

Why does cultural fit matter?

Boards operate in a ‘fragile ecosystem’, where effective decision-making relies on members being able to have robust discussions whilst still maintain working relationships. Any new board appointment might be deemed an incursion as a new member risks this delicate balance. For this reason ensuring the cultural fit of a new member to the board is of paramount importance.

In most board recruitment processes the issue of cultural fit is rarely articulated. You won’t find it in a job specification or be asked directly about it in an interview; having said that, in my experience it is never far from the minds of many Chairs or Recruiters.

Invariably, this topic arises behind the scenes and carries considerable weight in the decision making process. So what is it and how can you demonstrate having it?

How do you demonstrate having a cultural fit?

Many consider the cultural fit question as something poorly defined and even more difficult to address adequately in an application. It is not.

There are a number of ways you can demonstrate your appropriateness for a board appointment in terms of your cultural fit.
The most obvious is linked to your current executive experience. For example, if you work in a financial institution, then sitting on the board of a similar institution would suggest being like-minded.

  1. By demonstrating your knowledge of, or personally knowing, board members. Equally, knowing and referencing individuals you have in common with other board members provides some comfort in your appointment.
  2. Using the vernacular of the board/industry equally provides comfort to the appointing board that you are familiar with what they do and how they do it.
  3. Really researching and getting into the detail of what the organisation does and evidencing this research – think mystery shopping, visiting the office, buying the product and speaking to competitors.

What does a cultural mis-fit look like?

On the occasions I have seen a board appointment fail it is often due, in part, to an inappropriate cultural fit. For example, it could be that a new member does not appreciate the ‘slow pace’ of a board or be more/less commercially orientated to other board members. Equally, a new member might not appreciate the regulatory responsibilities of a board in a particular industry or they simply might not like the other board members or their perspectives.  The end result is often a board that is fragmented, has an inability to hold a ‘common line’ or is unable to hold to a strategic decision.

How can you tell what the culture of a board is like?

Many of the reasons for a failed appointment can be addressed by ensuring/encouraging a candidate to undertake comprehensive due diligence. Perhaps the best way to determine your fit to a board is to sit in on a board meeting. Additionally, meeting other Directors prior to joining the board is highly encouraged, as is meeting the Chair.

With the exception of the latter, in my experience, this level of due diligence rarely occurs but it is really essential.

I would also add into the mix speaking with the CEO and perhaps the Auditors to round out your perception of the board and the organisation.

Surely it is not such a big deal?

It is. Cultural fit lies at the heart of many a failed board application and as such, a misfit is likely to mean a short appointment. This means wasted time and a further disruption to the board resulting in lost opportunities and unnecessary expense; things that no Chair wants and will do all they can to avoid the reputational damage associated with this failure.

All of the above requires a degree of research prior to putting in an application or meeting the board. However, doing this research can mean the difference between your appointment or not.

Remember, dare them not to appoint you.

About the Author

David Schwarz is CEO & Founder of Board Direction – Australia’s leading board advertising and non-executive career support firm. He has over a decade of experience of putting people on boards as an international headhunter and a non-executive recruiter and has interviewed over one thousand non-executives and placed hundreds into some of the most significant public, private and NFP roles in the world. He has been described as Australia’s leading board recruitment expert, is a published author, a regular speaker on the board appointment process and runs Board Search Masterclasses across Australia. He is one of Australia’s Top 10 LinkedIn users with over 20,000 connections. Email: Contact@boarddirection.com.au

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