Who Defines Your NFP’s Culture?

I doubt anyone would argue that a strong culture is critical to the performance and productivity of an organisation. Culture sets and communicates the expectations for performance, priorities, customer service, product quality, safety and a myriad of other factors.

I like Kerwin Rae’s definition of culture:

"The values and behaviours that contribute to the unique social and psychological environment of an organisation.

Organisational culture includes an organisation’s expectations, experiences, philosophy, and values that hold a team together. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid.

It affects the organisation’s productivity and performance, and provides guidelines on customer care and service, product quality and safety, attendance and punctuality, and concern for the environment."

Another, more formal, definition comes from the Criminal Code Act 1995 which defines culture as:

“…an organisation’s attitude, policy, rule, course of conduct or practice existing within the body corporate generally or in the part of the body corporate in which the relevant activities takes place”

Not-for-profit organisations often have a broader range, and number, of stakeholders than the for-profit world. Those stakeholders often have vested long term interests in the organisation, leading to strong emotional connections. It could be argued that getting the culture right in the not-for-profit world is even more critical than the for-profit sector.

Given culture in not-for-profit organisations is so critical to their success, why do so many of their Boards not define, steer and monitor their culture?

The Australian Institution of Directors (AICD) agree that not-for-profit Boards should be immersed in an organisations culture – Principle 9 of the “AICD Good Governance Principles and Guidance for Not-for-Profit Boards” is:

"The board sets the tone for ethical and responsible decision-making throughout the organisation."

So how does a Board start the journey of setting an organisations culture:

1. Put organisational culture on the Board’s agenda regularly. The Board needs to regularly monitor and review the culture.

2. Create a documented “Values Statement” or set of “Core Values” that are important to the organisation. Ensure these values are communicated in a variety of forms, that decisions are made through the lens of these values, and that stakeholders are held accountable to them.

3. Create a Board “Code of Conduct” to which Board Members are held accountable.

4. Create an organisational “Code of Conduct” to which all stakeholders are held accountable.

5. Have a robust disciplinary policy that allows for correction of those stakeholder who do not follow the codes or values.

It’s often helpful to have an external facilitator assist with discovering current, and setting new, values and culture. Board Members, along with all other stakeholders, can be blinkered by their history with an organisation, their personal interests and emotional connections, personal investment, and sometimes even their financial investments (e.g. donors).

Please share your thoughts in the comments section below - I learn just as much from you as you do from me.

Dwayne Wescombe – Managing Director

TakeControl Solutions

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