What can a board member do about a toxic culture?

p 1 one of my investments is performing but the company culture is toxic what can i do

Editor’s Observe: Every week Maynard Webb, former CEO of LiveOps and the previous COO of eBay, will provide candid, sensible, and typically stunning recommendation to entrepreneurs and founders. To submit a query, write to Webb at [email protected].

Q. I’m fearful about one of many firms in our portfolio. The enterprise is doing very effectively, however the firm is getting slammed by the press for its tradition. I’ve tried to name consideration to this situation, nevertheless it’s nonetheless not fastened. Given your years of board expertise, I hoped you’d have some steering.

 –Investor and Board Member


Pricey Board Member,

It seems like a powerful scenario. It’s onerous when you find yourself seeing unseemly conduct. It’s particularly onerous once you’ve known as it out, it’s been ignored, and now has develop into a public situation.

I’m sorry that your warnings have gone unheeded. First, it’s a signal that they don’t reply effectively to suggestions and a sign that they’re reluctant to comply with good recommendation. Second, an ongoing situation like this may have actual ramifications—together with an influence on hiring and shareholder worth. The reality is this may find yourself stopping the corporate from residing as much as its full potential. No matter the truth that they haven’t listened previously, it’s nonetheless your job to get by means of to them now. You might be on the board and you might want to proceed to attempt to make the conduct cease.

I’m hopeful that for the reason that situation has been extra broadly uncovered it is going to be addressed extra significantly. I all the time advise firms to take a look at each resolution and motion they make as one thing that could possibly be on the entrance web page of The New York Occasions. Would shining a highlight on it make them proud? Or embarrassed? One other train I recommend is to think about your mom sees the whole lot that you simply do—would she be happy? Would you? Now that that is out within the open, maybe they are going to be extra responsive to creating significant modifications.

Whenever you subsequent talk about this situation with the founders—even if you’re rightfully aggravated—I might urge you to hear first. This isn’t a time to pile on and make accusations. Type out any of the emotion and defensiveness so that you can get to the details, and extra importantly, get to the conduct change wanted to get again to creating the corporate nice.

To maneuver forward, I recommend they rent somebody to do an unbiased assessment and that particular person report back to the unbiased administrators. This may assist to floor the problem from unbiased events and provides concrete suggestions on what to do to maneuver ahead.