Culture and compensation

Here is what a recent survey of C-suite and Board members found about corporate culture:

“When it comes to how boards can influence culture, 62 per cent of respondents say that “setting the right tone from the top” is most important. The second most important aspect is ensuring the chief executive officer is supportive of the desired culture. In third place comes recruiting similarly supportive board members and senior management. This suggests that directors believe that positive culture cannot be bought or taught. Instead, it is something inherent in those at the top.”

Given that culture is an outcome of processes, it is disappointing to read these findings. Tone at the top is important but too often actions don’t match words. CEO support is crucial but what if she doesn’t know how to change culture? Recruiting (an actual process) will only be effective if we recruit colleagues that actually know how to change the culture.

Let me now add the final sentence of the paragraph quoted above, and perhaps you will also find that most of the leaders surveyed do not have the skills or willingness to change the culture:

“Strikingly, they do not believe that remuneration and incentives are key for setting the right tone at the top and influencing the corporate culture.”

What?!

How you compensate and incentivise are two of the most powerful drivers of culture!

Yet, those responding to the survey – the ones we most generously compensate and incentivise – are dismissing those two key processes.

Have we unintentionally incentivised our leaders not to change the culture?

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