Exam Practice - Culture - Chait, Pearce and Zahra Flashcards
(8 cards)
Whats a good introduction to assess and evaluate Board Culture, using 2 frameworks at BBPLC?
This answer evaluates the Board’s culture and power dynamics at Beddy Buys plc using two diagnostic frameworks: Chait, Ryan and Taylor’s Bedrock Model and Pearce and Zahra’s Power Typology.
It applies these frameworks to identify weaknesses in leadership, challenge, and engagement, and proposes reforms that support strategic alignment, psychological safety, and effective decision-making, in line with the UK Corporate Governance Code.
what is board culture?
Board culture reflects “the way we do things around here” (Handy, 1993), shaped by visible behaviours and deeper assumptions (Schein, 1985), and influenced by multiple cultural layers, including organisational and national norms (Hofstede, 1991).
it encompasses the informal behaviours, tone and shared expectations that shape how decisions are made, how challenge is expressed, and how effectively the Board fulfils its governance responsibilities
Describe Chaits BEDROCK Framework
Chait’s model highlights how Board behaviours (collaboration, challenge, ownership) create a culture that either promotes or inhibits strategic leadership.
Chait, Ryan and Taylor (2005) use two axes – Engagement (Group vs Free Agent) and Oversight Role (Guardian vs Watchdog) – to define four cultural types:
ROLC
Regulatory: Risk-focused (Group + Watchdog)
Orchestra: Cohesive and strategic (Group + Guardian)
Lone Ranger: Isolated and reactive (Free Agent + Watchdog)
Consultant: Detached but informed (Free Agent + Guardian)
Describe PEARCE and ZAHRA’s Power Typogology
Pearce & Zahra focus on the distribution of influence between CEO and Board, revealing whether governance is symbolic, controlling, or genuinely engaged.
Pearce & Zahra (1991) Use CEO power and Board power to define four power cultures:
Caretaker: Weak CEO, weak Board – exists only for legal formality
Statutory: Strong CEO, weak Board – rubber-stamps decisions
Proactive: Strong Board, weaker CEO – actively governs and directs
Participative: Shared power – encourages healthy debate and negotiation, but may risk conflict
What is the benefits of using these frameworks to analysis Board Culture?
Together, these frameworks provide a rounded lens to assess the Board’s tone, decision-making environment, and effectiveness in challenging executive authority.
Using the frameworks, identify what cultures you see at BB PLC
Beddy Buys exhibits a fragmented and ineffective governance culture, where both structural power and behavioural tone are misaligned with good practice.
According to Pearce & Zahra (1991), the Board reflects a Statutory type:
although the Chair is innovation-focused, the CEO holds dominant power over strategic direction, while the Board exerts little authority or influence.
NEDs are largely disengaged, and there is no substantive Board-led oversight of key areas such as ESG, succession planning, or stakeholder engagement.
Board power is low, with decisions often steered by the executive rather than emerging from collective debate.
This reflects a Board that exists primarily for legal formality, not governance leadership.
From a behavioural standpoint, Chait et al.’s Bedrock Model suggests the culture aligns with a Consultant Board drifting toward Lone Ranger.
While directors are nominally informed, there is minimal reflection, collaboration, or shared ownership.
The NEDs remain largely silent in meetings, offering little challenge or input, while CJ (CFO) withholds feedback from staff, suggesting a lack of psychological safety (Edmondson, 1999).
This reinforces a fragmented tone and an absence of shared ownership at the top.
Informal interaction is limited, and the Chair has not fostered a cohesive team dynamic. The tone from the top is fragmented, with individual actors rather than a unified Board voice.
Together, these cultural signals point to a Board that is neither strategically effective nor behaviourally cohesive. This misalignment breaches several principles of the UK Corporate Governance Code – notably Principle A (clear leadership and purpose), Principle C (Board composition and challenge), and Principle D (decision-making effectiveness) – thereby undermining accountability, risk oversight and long-term organisational resilience.
As CoSec, how can you assist and what recommendations and actions would you put in place?
The Company Secretary can play a key role in leading structured change based on these frameworks.
A - Shift the Board’s Power Dynamic (Pearce & Zahra)
Use the next Board evaluation to assess the current power balance using Pearce & Zahra’s framework.
Move from Statutory to Participative:
Create or strengthen formal subcommittees (Audit, Risk, Nomination) to balance CEO influence.
Ensure Board involvement in setting strategy, risk appetite, and ESG goals.
Define Board authority in governance documents such as matters reserves for the Board, TOR, role and resp. docs and clarify decision rights.
B - Rebuild Cultural Cohesion (Chait et al.)
Introduce Chait’s model in a facilitated reflection: “Where are we now? Where do we want to be?”
Aim to move from Lone Ranger/Consultant to Orchestra – a cohesive, strategic, guardian-style Board.
Develop a Board Charter defining expected behaviours, tone, and shared leadership values.
Integrate Chair coaching, behavioural feedback, and rotating speaking roles into Board practice.
Create space for informal interaction between the Board and ELT – including pre-meeting briefings, mentoring, and site visits.
C. Embed Cultural Reinforcement into Meeting Design
Incorporate structured reflection time in agendas (e.g. ‘What went well?’ segments).
Trial pulse surveys or silent feedback tools to surface issues safely.
Redesign the agenda to focus early on strategic items, not just risk or compliance.
What is the rational for this, why is it important at BBPLC?
The interaction between Board power and Board culture is central to governance effectiveness.
Carillion’s collapse (2018) exemplified the dangers of symbolic governance, weak challenge, and CEO dominance. By contrast, a proactive, Orchestra-style Board acts as a strategic partner, not a rubber stamp.
These recommendations support:
Principle B – building a balanced Board with a mix of skills and voices
Principle C – ensuring effective Board dynamics
Principle D – enhancing decision-making and accountability
At Beddy Buys, moving toward a Participative/Orchestra culture will rebuild psychological safety, enable better scrutiny, and foster long-term strategic alignment. The CoSec is uniquely placed to support this evolution, ensuring governance becomes both technically sound and behaviourally effective.
