Culture Is an Execution System: What Boards Should Measure, Challenge, and Protect

CEOs and CHROs must align leadership behavior, talent decisions, incentives, and escalation systems with the strategy the board has approved. 

Culture is often discussed as a set of values, an employee-engagement priority, or an HR responsibility. Those descriptions are incomplete. Culture is the system through which strategy is translated into daily decisions, behaviors, and results. 

It determines how leaders allocate resources, how managers handle competing priorities, whether employees raise concerns, who advances, what conduct is tolerated, and how the organization responds when performance, risk, or customer issues emerge. For boards, culture is therefore an execution and governance issue. 

The case for treating culture as an execution and governance issue is stronger amid economic, geopolitical, and technological uncertainty. The Conference Board’s 2026 boardroom-priorities report describes US boards sharpening their governance focus as that uncertainty grows. Stanton Chase’s own research shows what it does to decisions inside the business. In The Rehearsal Gap, our survey of 112 senior executives, 77% of organizations were taken by surprise by a geopolitical event in the past year, and 49% of leadership teams delayed, revisited, or reversed a decision that had already been approved because of geopolitical uncertainty. Culture decides how well an organization handles those moments, including whether people flag problems with an approved plan early, how quickly bad news reaches someone who can act on it, whether the leadership team can debate the change openly, and whether leaders hold to the same standards once the plan changes. In conditions like these, those habits become material to enterprise performance. 

Culture is Visible in Business Decisions

The practical test of culture is whether the organization’s values influence consequential decisions when business pressure increases. Reciting the values proves little. 

A company may say that collaboration is important, but its performance-management and incentive systems may reward only individual or functional outcomes. It may encourage employees to speak up, but managers may dismiss concerns that challenge a senior leader or delay a commercial objective. It may state that customer experience is a priority, while internal decision rights, staffing levels, or operating metrics make responsive service difficult. 

Employees observe these differences. Over time, the formal values become less influential than the patterns they see repeated: what leaders reward, what they tolerate, which individuals are promoted, and what happens when results are achieved through conduct that damages trust, quality, customer relationships, or risk management. 

Those patterns start at the top, and executives often experience the culture very differently from the people they lead. Gallup’s research on organizational culture found that only two in 10 U.S. employees strongly agree they feel connected to their organization’s culture, while 40% of leaders do. Leaders’ behavior also counts for a great deal in how employees judge that culture. Employees who strongly agree that their leaders are committed to the organization’s cultural values are 9.8 times as likely to rate their workplace culture as excellent. For executives, their own conduct is the clearest evidence employees have of what the culture is. Boards, in turn, should not rely on management’s account of the culture alone, since leaders feel far more connected to it than the workforce does. 

What employees feel about the culture shows up in how they work. Gallup’s State of the Global Workplace report puts employee engagement worldwide at 20% in 2025. Connection to culture is one of the things that moves that number. US employees who feel connected to their culture are 3.7 times as likely to be engaged at work. They are 5.2 times as likely to strongly agree they would recommend their organization as a great place to work. A board reading only an engagement average sees the result without the cause. 

For boards, the question is straightforward: Does the culture reinforce the behaviors, decisions, and leadership capacity required to execute the strategy the board has approved? 

What Boards Should Measure in Culture

Culture cannot be assessed through a single engagement score, annual survey, or values statement. Boards need a balanced view built from workforce, leadership, conduct and risk, and operating information, tracked over time. Each of those areas has its own indicators: 

• Workforce indicators, including voluntary and regrettable turnover, especially in key roles and among high-performing employees; internal mobility; promotion patterns; employee-relations trends; exit-interview themes; and employee-listening data segmented by business unit, geography, leadership level, and tenure. 
• Leadership indicators, including executive and manager feedback, leadership-assessment findings, the consistency of performance-management practices, succession readiness, and the degree to which promotions reflect both performance and leadership behavior. 
• Conduct and risk indicators, including ethics hotline activity, investigation patterns, retaliation allegations, compliance concerns, audit findings, quality failures, safety events, customer complaints, and recurring control exceptions. 
• Operating indicators, including cross-functional decision delays, customer-service outcomes, rework, defects, product-quality concerns, and other evidence that the organization’s operating model may not support its stated priorities. 

However, data must be interpreted in context, and recent hotline figures show why. NAVEX’s 2026 benchmark report found that median reports per 100 employees reached a record 1.65 in 2025. A rise like that may indicate worsening conduct, but it may also reflect growing confidence in reporting channels, and NAVEX notes that past periods of economic uncertainty often brought lower reporting as employees avoided drawing attention to themselves. Retaliation figures need the same care. Only 16% of retaliation reports were substantiated, compared with 44% of all reports, which could mean many claims lack merit or that retaliation is harder to prove, and NAVEX says the gap calls for careful oversight. By the same logic, a low level of reporting is not automatically a positive sign. The more important questions are whether concerns are raised early, investigated fairly, addressed consistently, and followed by visible accountability. 

Reading these signals takes judgment, and that difficulty can tempt boards to leave culture to management. Culture is still a corporate asset with concrete impact, and its oversight is closely connected to strategy, CEO and senior-leadership selection and evaluation, reward systems, and risk oversight, all of which already sit with the board. 

What Boards Should Challenge

The board’s role in culture oversight goes beyond receiving culture data. Directors should test whether the culture the organization says it has matches the culture its incentives, leadership practices, operating systems, and outcomes reveal. Culture rarely appears under its own name in a board pack, so the most useful questions focus on the behaviors and decisions where it becomes visible: 

• What behaviors are necessary for the organization to execute its strategy? 
• Where do incentives, performance measures, decision rights, or leadership practices discourage those behaviors? 
• Are senior leaders evaluated on how results are achieved, as well as on financial and operating outcomes? 
• What evidence indicates that employees can raise difficult issues without retaliation? 
• What does the organization’s promotion and succession process reveal about the leadership behavior it truly values? 
• Where are cultural conditions materially different across functions, geographies, business units, or acquired companies? 
• Does management receive bad news early enough to act, or only after an issue has become a financial, operational, customer, or reputational problem? 

These questions become especially important during significant change. A new strategy, acquisition, restructuring, AI-enabled work redesign, or CEO transition requires employees and leaders to change how they make decisions and perform work, which communication and project management alone cannot achieve. If the underlying incentives, manager capability, and accountability systems remain unchanged, the prior culture will usually prevail. 

What Boards Should Protect

Boards should not manage culture directly. That is the responsibility of the CEO, the CHRO, and the executive team. However, directors have an essential role in protecting the conditions that support responsible execution. 

First, boards should protect candor and constructive challenge. Leaders need accurate information, including information that is uncomfortable or inconsistent with prevailing assumptions. Employees need credible means to raise concerns. Senior teams need the ability to disagree productively, resolve conflict, and escalate risks without fear of retaliation. 

Second, boards should protect leadership accountability. The organization closely watches whether leaders who deliver short-term results are held to the same conduct and people-leadership standards as everyone else. The board’s evaluation of the CEO, its review of executive incentives, and its involvement in CEO and C-suite succession all tell the organization which culture will be reinforced. 

Third, boards should protect clear decision rights and credible escalation systems. Ambiguity about who can decide, challenge, or escalate often slows execution and creates workarounds. A healthy culture still has disagreement and risk, but it makes it more likely that difficult issues are recognized, discussed, and resolved before they become larger failures. 

Finally, boards should consider their own culture. Directors need sufficient psychological safety to ask difficult questions, challenge management constructively, hear dissenting views, and revise their positions when new evidence emerges. Many boards find that difficult in their own boardroom. PwC’s 2025 corporate directors survey found that cultural barriers, such as collegiality and discomfort with hard conversations, continue to keep boards from acting on problems in their own ranks. Directors in the same survey said that building trust and a supportive environment opens space for candid conversation. Effective culture oversight begins with a board that practices the same candor and accountability it expects from the organization. 

The Practical Test for Boards

Culture and performance are inseparable, because culture drives the behaviors and decisions through which performance is achieved. Those behaviors and decisions come from the organization’s incentives, leadership behavior, talent decisions, decision rights, and escalation mechanisms. That is where board oversight of culture belongs, while culture programs and employee engagement stay with management. The board’s task is to judge whether those systems reinforce the strategy and risk posture it has approved. Broad assurances from management cannot settle that, so boards that treat culture as an execution system keep returning to three practical questions, each with an answer the board can check against evidence: 

• What are we measuring? The board should be able to name the culture indicators it reviews and see them broken down by business unit and leadership level over time. If all it sees is an engagement average, or nothing in the board pack would warn it of trouble, the measurement is too thin. 
• What are we challenging? Directors should be able to point to recent occasions when they tested management’s account against evidence, such as incentives that rewarded the wrong behavior, promotions that contradicted the stated values, bad news that arrived late, or one business unit drifting from the rest. If no recent challenge led to a change, the board is receiving culture reports, not overseeing culture. 
• What conditions are we protecting? The answer lies in decisions the board has already made. A high performer who broke conduct standards and still faced consequences is evidence of protected accountability, and so is an escalation that reached the board early. If directors cannot name a decision like that, they are assuming those conditions exist instead of protecting them. 

The answers will influence employee experience as well as the organization’s ability to execute strategy, adapt to change, identify risk early, and sustain the trust of employees, customers, investors, and other stakeholders. 

About the Authors

William Brewer, CCP, is a Managing Director at Stanton Chase Los Angeles. He serves as the firm’s Global Functional Leader for Human Resources and its Global Advisory Leader for Executive Onboarding, and he is a member of the Stanton Chase CEO Search and Succession practice. Bill advises boards and CEOs on the assessment, selection, succession, and onboarding of senior leaders, including CEOs, CHROs, chief people officers, and other members of the C-suite. 

Before joining Stanton Chase, Bill served as Chief Human Resources Officer for InSight Health, Epicor Software, and Alorica, organizations ranging from 3,000 to 20,000 employees. Earlier in his career, he held human resources leadership roles with The Walt Disney Company and Fluor Corporation. Bill earned an MBA from the University of Redlands, where he has served as an adjunct professor, and he is a Certified Compensation Professional through WorldatWork. 

Iris Drayton-Spann is a Managing Director at Stanton Chase Washington, D.C. and Regional Functional Leader for Inclusive Leadership and Culture in North America. She places executives across functions for corporate, nonprofit, and non-governmental organizations. Before joining Stanton Chase, Iris was Vice President of Human Resources and Chief Diversity Officer at WETA-TV, where she built out the station’s HR function and engagement and chaired its diversity council. Her degrees are from George Washington University and Howard University. 

Nathan Motjuwadi is a Director and Senior Partner at Stanton Chase Johannesburg, where he leads Human Resources assignments across financial services, consumer products, and professional services. He joined the firm in 2022. Three decades in people leadership came first, as Group HR Manager at Coca-Cola South Africa, then as HR Director at Danone Southern Africa, and then running Executive HR at Capitec Bank through its years of rapid growth. Nathan holds a social science degree from the University of Cape Town and an MBA from Milpark. 

Linda Roberts Power is a Partner at Stanton Chase Dublin. She leads board and senior executive appointments across Ireland and the United Kingdom. Her work centers on CEO search and succession, financial leadership, and human resources. Linda has worked in executive search for more than nineteen years, fifteen of them at another top global executive search firm, where she helped build and develop its Irish office. A decade in senior HR roles at Sainsbury’s and Times Newspapers preceded all of it. Her degrees are from Cambridge, Leicester, and Westminster.