Insurance Governance Leadership Network, May 2016
“As a board member, you have to think about culture,” said one director. Conversations with dozens of leading insurers confirm not only that board members view organizational culture as an important topic but also that they are increasingly focused on it in the boardroom. This is a significant development given that the responsibility to manage and shape culture has historically resided with the CEO and C-suite. However, as several participants noted, culture is at the heart of many directors’ top priorities, including fostering innovation, managing risk and compliance, selecting CEOs, governing merger and acquisition considerations, and attracting talent.
If culture is becoming more of a board matter, the question for boards becomes, in the words of one director, “What is the role of the board in addressing culture?” Most directors agree that examining culture is a key part of their responsibility because culture underpins strategy and performance. One director said, “The board is accountable for organizational performance. If that is going well, or not well, you need to assess why. A good board member has a real sensitivity to the importance of culture on performance.” However, board members are still determining how best to fulfill this responsibility.
On March 3, 2016 and March 15, 2016, IGLN non-executive directors, executives, supervisors, and select guests convened in New York and London to discuss how global insurance companies are addressing organizational culture as a means both to ensure compliance with regulation and to position their companies for the future. For a list of discussion participants, see Appendix 1 on page 14.
This ViewPoints provides context based on conversations with network participants and is guided by the following questions:
What factors are driving the topic of culture up the board agenda?
What is the board’s role in shaping organizational culture?
How can boards best understand culture within their organizations?