CEO letter: The Culture change

Kirsten (KP) Patterson

Malo e lelei 

It was Mahatma Gandhi who said “a nation’s culture resides in the hearts and minds of its people”. But where does the culture of a company reside?

One of the most requested sessions for our leadership conferences each year is ‘war stories’ or case studies of governance ‘failures’ so we may learn from others’ mistakes. Yet it can be difficult to find examples where people are able, or prepared, to speak about times when governance was hard, tricky, and where things have not gone as intended.

The recent release of the Independent Review of Russell McVeagh by Dame Margaret Bazley is a glimpse into one of these examples that we as a governance community cannot afford to waste.

Failings were found in the firm’s governance, structure, management, policies, standards, and systems. The review references that the report “reflects the commitment to telling the story of what happened and didn’t happen and the dreams and disappointment of the people who have worked for the firm in recent years.”

The Bazley report speaks to independent review of governance structures, the tenure of board chair and board members, the role of the board chair, the role of the board in driving transformational culture change, the appointment of independent board members, and the adequacy of board reports. The report also recommends that board committees and appointment processes be reviewed. All important and relevant messages for many organisations beyond those just in the legal fraternity.

Dame Margaret noted that a culture change of the magnitude envisaged by this review takes a long time to effect. She estimates it will take 10 years and notes the essential role that the board will play in ensuring the culture is monitored, measured and reported on if the momentum and priority is to be maintained.

The transparent and public release of the report was a brave and courageous move by the firm and has the opportunity to have impacts beyond their own transformational culture change. A recent Law Society survey revealed that there are bullying and harassment issues across the entire legal profession. Just as people behave within a company context, companies themselves also exist within an industry context. We would be naïve to think that issues are restricted to one organisation or even one industry.

Good governance demands of us that we are scanning across industries for trends and messages that we should adopt, or that could impact our own organisations.

Gandhi not only gave us the well-known and often quoted “be the change you wish to see in the world,” but he also importantly expressed that “action expresses priorities”.
It may be time to reflect if our actions and questions as directors are expressing the priority of culture change that we all wish to see.

Faka’apa’apa atu,

Kirsten (KP)

2018 August/September BoardRoom