Culture: More Important Than Ever

“Corporate culture” may be a mere buzzword to some directors, but the 2022 NACD Directorship 100 list of honorees offers compelling examples of its importance. Honorees serve on the boards of various organizations, including USA Gymnastics, which is going through a culture transformation, and Headspace, which has built a reputation for focusing on well-being and mindfulness inside and outside of its office walls.

We can all learn from these examples of board leadership as we endure the Great Resignation—a time when the adage “Our people are our most important resource” rings true. Data from the US Bureau of Labor Statistics (BLS) show a steady rise in the number of resignations during 2021, with well over 4 million in both November and December. The trend has continued into this year: in February, 4.4 million people quit or changed jobs, according to the BLS.

Not surprisingly, investors are asking for more data on workforce trends and are likely to support new US Securities and Exchange Commission (SEC) proposals expected before midyear. As of this spring, comments were still coming in for a 2017 rulemaking petition from the Human Capital Management Coalition of investors asking the SEC to require better workforce information disclosures. In 2020, the SEC approved a requirement for disclosure of any “human capital measures or objectives that the registrant focuses on in managing the business,” but some investors want to see more, including, notably, turnover rates. 

Why are people leaving? Researcher Jaime Dunaway-Seale surveyed 1,000 employees who quit their jobs recently, asking them to check all answers that applied. While some of the reasons were purely financial, 31 percent of respondents cited a “toxic corporate culture,” characterized by one or more of the following: “discrimination, sexual harassment, verbal abuse, and poor work-life boundaries.” These findings add credence to a new kind of proposal that we are seeing this proxy season: at the annual meeting of Starbucks Corp., held March 16, the New York State Common Retirement Fund asked for an annual report on the prevention of workplace harassment and discrimination.

As directors learn more about the root causes of the Great Resignation, they should leave no clue unexamined. Now is the time to get to know all of your people—your corporate leadership and your fellow directors, and especially the inspiring Directorship 100 honorees. ■

This article is from the Spring 2022 issue of Directorship.