What is the Board’s role in overseeing a company’s culture and why is that important?
Minneapolis corporate governance attorney, John Stout, explains how company boards can influence culture.
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Corporate culture really defines the character of a business and the law makes the Board of directors responsible for seeing that there is in place an ethical culture and a culture which highly values legal compliance. We’ve had a dramatic example of a corporate culture failing in recent weeks with the whole Volkswagen emissions testing scandal. This is an incredible failure of corporate culture that will cost the company and its employees billions of dollars and undermine the credibility of what was at one time a great brand. And it’s the starkest example right now, we’ve had others if you go all the way back to Enron but it’s a current, really stark example of what can happen if a culture really doesn’t value ethical conduct and legal compliance.