in today’ s fast-changing environment. Since transitioning into consultancy and youth mentorship, I’ ve come to view continuous learning as non-negotiable. Organizations that prioritize learning adapt faster, recover from setbacks more effectively, and turn challenges into growth opportunities.
With these cultural foundations- purpose, ethics, psychological safety, accountability, and learning- organizations are better positioned to navigate complexity, manage risk, and create environments where people thrive. Healthy culture isn’ t just a“ nice to have”- it’ s the engine that drives sustainable, ethical, and resilient performance.
The |
Role |
of |
Boards |
and |
Senior |
Management: |
From |
Oversight |
to |
Stewardship |
|
|
|
Boards and senior management must go beyond passive oversight and take active stewardship of culture. From my own experience participating in board-level strategy and risk engagements as part of the bank’ s leadership team, I’ ve seen how powerfully culture shapes an organization’ s long-term viability. Strategic plans often rise or fall not because of flawed design, but because of cultural misalignment during execution.
This begins with reframing oversight. Boards should not only ask,“ Is the strategy sound?” but also,“ Does our culture support this strategy in practice?” Culture is the often-overlooked enabler- or blocker- of execution. When ignored, even the most carefully designed strategies stall.
Equally essential is the visible conduct of leadership. Culture doesn’ t spread through memos; it spreads through example. When executives act in ways that reflect organizational values- prioritizing ethics, transparency, and accountability- those standards begin to ripple throughout the organization. It’ s not about slogans, but about demonstrated behavior that reinforces what truly matters.
The Wells Fargo fake accounts scandal remains a cautionary tale of what happens when leadership signals, incentives, and cultural values become misaligned. Driven by aggressive sales targets, employees opened millions of unauthorized accounts to meet quotas- often without customers ' knowledge or consent. What enabled this? A culture that rewarded results at any cost and tolerated misconduct by top performers. The Wells Fargo leadership failed not only in oversight but in reinforcing a culture of integrity. The result was massive reputational damage, regulatory penalties, and the resignation of senior executives. This case reminds us that toxic culture isn’ t a side issue- it’ s a strategic and enterprise-level risk.
To prevent such outcomes, leadership must treat investment in culture with the same seriousness as investment in infrastructure. Leadership development, ethics training, and collaboration tools are not optional- they are enablers of trust and long-term performance. Without them, even well-intentioned cultural initiatives lose traction.
Boards and senior leaders must also ensure that culture is reflected in performance management systems. When cultural indicators- such as team behavior, ethical decision-making, and contribution to a respectful work environment- are built into executive appraisals, it signals that leadership is being evaluated not just by what is delivered, but how it is delivered.
In my work across sectors, one truth continues to emerge: culture cannot be a quarterly talking point or an item on the annual retreat agenda. It must be part of the daily leadership language. Internally, it cultivates alignment and trust across teams. Externally, it builds confidence with regulators, investors, and the broader public.
In today’ s hyper-connected world, leaders are scrutinized not just for what they say- but for what they signal through behavior, priorities, and decisions. When there’ s a disconnect between narrative and action, trust erodes quickly. That’ s why in truly risk-intelligent organizations, leadership doesn’ t just communicate values- it embodies them. By maintaining alignment between message and behavior, boards and senior leaders not only protect reputation- they foster cultures that drive performance, resilience, and ethical success.
Red Flags: Diagnosing Emerging Toxic Culture
Before culture becomes a strategic threat, it often whispers through behaviors we dismiss. Here’ s what to listen for.
Over the years, I’ ve developed a sensitivity to early cultural warning signs. One of the most telling is silence in meetings. When people stop speaking up, it’ s not a sign of discipline- it’ s a symptom of fear or apathy. It signals a breakdown of psychological safety and needs urgent attention.
Another clear sign is high turnover, especially among high performers. This often points to deeper issues like exclusion, lack of recognition, or poor leadership. If an organization can’ t retain its best talent, culture is often the root cause.
An overemphasis on performance at the expense of ethics is another red flag. When results are pursued blindly, employees may resort to questionable methods, paving the way for misconduct and reputational harm. In such environments, the ends justify the means- which sets a dangerous precedent.
Political behavior, gossip, and behindthe-scenes maneuvering suggest that trust and transparency are eroding. These behaviors fracture teams and divert focus. They often reflect a lack of alignment with shared values and an absence of clear accountability.
Perhaps the most damaging sign is when unethical behavior- especially by high performers- is tolerated. This sends the message that results matter more than integrity. It undermines moral standards and creates a permissive culture where rules bend for some and not for others.
Recognizing these red flags early gives leaders the opportunity to coursecorrect- before surface-level dysfunction becomes systemic breakdown.
The Risk Multiplier Effect of Toxic Culture
Toxic culture is not just bad for morale- it multiplies risk across the organization.
Operational failures become more frequent in environments where problems are hidden rather than addressed. When employees are discouraged from speaking up, small issues escalate into major disruptions. I’ ve seen this firsthand in environments where frontline staff were too afraid to flag concerns- until those concerns became full-blown incidents.
Ethical violations are another consequence. When an ethical framework is absent- or merely superficial- employees may begin to justify questionable behavior. These breaches often trace back to unclear values or inconsistent leadership signals.
Culture also shapes how well strategy is executed. Even the strongest plans collapse if the culture doesn’ t support them. In my early days in the corporate credit department, I often worked late, and my immediate superior- usually still
08 MAL66 / 25 ISSUE