by Joe Wilkins, Senior Advisor

Leadership Starts with Culture

Boards shape more than strategy. They shape the culture in which strategy takes root—or fails. That influence is often overlooked, especially when culture is treated as a communications or human resources responsibility. But governance, done well, sets the tone for how an organization behaves, adapts, and grows.

Culture isn’t what’s written in the employee handbook. It’s what people experience every day. When governance and management sponsor culture with clarity and consistency, it enables trust, speed, innovation, and transformation. When culture is left to drift, poor performance follows.

This article, the third in the New Governance Imperative series, explores how Board- level leadership can activate a performance culture by focusing on three interlocking priorities: inclusive environments, breakthrough transformation, and visible sponsorship. It also prepares the ground for the fourth and final installment, which will address what’s required to lead—foresight and courage.

Culture as Strategic Infrastructure

Boards are beginning to recognize culture for what it is: INFRASTRUCTURE. Like capital systems or compliance protocols, culture underpins the entire operating model. But unlike other systems, it is often under-governed. That’s where problems begin.

Some organizations have treated culture-building as a campaign—short-lived, symbolic, or delegated. The most damaging examples stem from efforts launched without

Board engagement or disconnection from the broader talent strategy. In these cases, initiatives lack rigor, coherence, or traction. At worst, they expose the organization to reputational risk.

That’s not a reason to retreat. It’s a reason to reset. When Boards treat culture as strategic infrastructure—interwoven with leadership development, brand trust, innovation, transformation, and risk—they reclaim their role as stewards of long-term organizational health.

Innovation and Transformation Requires Inclusion

Innovation and transformation thrive upon difference. The best ideas don’t come from echo chambers—they come from environments where people are free to challenge assumptions and bring different perspectives to the table.

Inclusion isn’t a social program. It’s a prerequisite for innovation and, ultimately, transformation. Teams with broader perspectives ask better questions. They see around corners. They iterate faster. And they’re more likely to find novel solutions to complex problems.

Boards can’t lead innovation and transformation without also leading inclusion. That doesn’t mean issuing statements. It means making sure the organization is structured to benefit from differences in background, experience, and thought. It means checking whether leadership succession plans reflect the diversity of the marketplace and the workforce. This means examining whether sponsorship is visible at every level—from Board to CEO, from CEO to senior leaders, and down into the organization.

Sponsorship: From Approval to Advocacy

Approval isn’t leadership. It’s permission. However, sponsorship is different. It means championing an idea, resourcing it, and standing behind it, even when it meets resistance. Sponsorship also demands being visible. Employees and stakeholders alike notice when the Board is present in shaping—not just approving—the culture of the organization.

We’ve defined sponsorship throughout this series not as passive endorsement, but as active leadership alignment—a vertical chain of commitment that runs from the

The organizations best positioned to thrive are those where innovation, transformation, and inclusive environments are inseparable—and where the Board is actively sponsoring all three.

Board to the CEO, from the CEO to senior leaders, and from those leaders into the organization. In this model, sponsorship becomes a durable system of belief, behavior, and reinforcement. It’s how transformation is led—not just announced.

Board-level sponsorship can take many forms: mentoring emerging leaders, backing new programs that reflect organizational values, or setting the expectation that inclusive environments, innovation, and transformation are not siloed goals, but part of the operating model.

Boards that act as sponsors—not just fiduciaries—create alignment. They build confidence across the organization. And they make it more likely that good ideas scale, not stall.

A Culture Fit for Transformation

What’s at stake here isn’t just reputation—it’s readiness. The speed at which markets, technologies, and expectations are evolving leaves no room for lagging cultures.

Organizations that can’t adapt internally won’t compete externally.

Accordingly, Boards must ask themselves:

• Is our culture designed for transformation?
• Are we building teams capable of innovative and breakthrough thinking?
• Do we have leaders who can work across differences, navigate ambiguity, and push the organization forward?

These aren’t soft questions. They go to the heart of long-term value creation. The organizations best positioned to thrive are those where innovation, transformation, and inclusive environments are inseparable—and where the Board is actively sponsoring all three.

What Comes Next

The pullback happening across many industries and organizations—from cultural commitments to leadership development—isn’t a recalibration. It’s a reaction. Fear of political exposure, funding loss, or reputational backlash has frozen progress in place.

But governance is not reactive work. It’s the work of thoughtful oversight and foresight.

The next and final piece in this series will explore how Board leaders can meet this moment with foresight and courage. Because courage—not compliance—is what sustains a high-performance culture and growth in uncertain times.

Finally, backing the principles and ideas set forth in this article, the accompanying appendix provides real-world evidence and business cases for inclusive, transformation-driven governance.

Appendix: The Business Case for Inclusive, Transformation-driven Governance

This appendix provides supporting evidence, data, and company examples that

reinforce the strategic case for Board-level sponsorship of inclusive cultures and innovation capacity. It is intended as a resource for Board members, executives, and governance professionals evaluating culture as a business lever—not just a communications or human resource initiative.

1. Financial Performance and Diverse Leadership

McKinsey & Company (2023)

• Companies in the top quartile for ethnic Board diversity were 36% more likely to outperform on profitability
• Gender-diverse executive teams showed 27% higher likelihood of superior financial performance
• Organizations with the least diverse leadership significantly underperformed peers over time

Source: McKinsey, “Diversity Matters Even More,” 2023

Boston Consulting Group (2023)

• Companies with above-average leadership diversity generated 45% of their total revenue from innovation, compared to just 26% at companies with below-average diversity

Source: BCG, “How Diverse Leadership Powers Innovation,” 2023

Credit Suisse Research Institute (2021)

• Companies with women in leadership roles (Board and executive) had higher return on equity, better valuations, and improved payout ratios over 5 years

Source: CSRI, “The CS Gender 3000: The Changing Face of Companies,” 2021

1. Decision-Making, Risk, and Organizational Resilience

Harvard Business Review (2017–2024)

• Boards that are cognitively diverse are better positioned to avoid groupthink, challenge assumptions, and guide innovation strategy
• Cognitive diversity improves decision quality and organizational foresight

Sources: HBR, “The Board’s New Innovation Imperative”; HLS Forum on Corporate Governance

Russell Reynolds (2019)

• Board sponsorship of innovation is one of the strongest predictors of digital transformation success across financial services
• Organizations with active Board sponsors were twice as likely to launch high-impact innovation initiatives

Source: Russell Reynolds, “The Innovation Imperative,” 2019

III. Talent Acquisition, Brand Equity, and Market Competitiveness

Deloitte (2023)

• 78% of job candidates report that a company’s commitment to inclusive leadership and culture influences their decision to apply or accept an offer
• Inclusive leadership correlates strongly with employee engagement, innovation behaviors, and retention

Source: Deloitte, “Diversity, Equity, and Inclusion: Uncovering Organizational Blind Spots,” 2023

Glassdoor & Indeed (2022–2023)

• Companies with high internal inclusion scores have 14% higher employee retention over a 24-month period
• 76% of job seekers say a diverse leadership team is a factor in choosing where to work

Source: Glassdoor Workplace Trends Report, 2023

F5, Gen Digital, and Ralph Lauren (2023)

• Internal case studies link visible Board-level commitment to inclusion with improved executive recruiting and internal mobility, particularly among underrepresented talent
• In F5’s case, half the executive team now comes from underrepresented groups, credited directly to Board priorities and sponsorship

Source: Fortune, “Modern Board 25,” 2023

IV. Real-World Governance Examples

F5, Inc. (Technology – Seattle, WA)

• 7 of 11 Board members from underrepresented groups
• CEO François Locoh-Donou credits Board diversity with attracting top leadership talent and reshaping the executive team
• Recognized by Fortune in 2023 as the #1 “Modern Board” for strategic, inclusive governance

Source: Fortune, Modern Board 25, 2023

Gen Digital (Cybersecurity – Global)

• Board diversity included global, gender, and LGBTQ+ representation
• Successfully guided $8 billion international acquisition (Avast) under complex regulatory scrutiny
• Women chair cybersecurity and technology committees

Source: Fortune, Board Innovation Profiles, 2023

Ralph Lauren (Retail – Global)

• Board includes Valerie Jarrett, bringing public-sector and regulatory insight.
• Credited with pushing Board beyond short-term thinking to consider “moonshot” opportunities.
• Diversity of experience seen as key to international brand expansion and relevance

Source: Fortune, Board Innovation Series

Costco (Retail – U.S.)

• Faced a shareholder proposal to scale back cultural commitments
• Board brought the issue to a vote and secured overwhelming support (~ 98%) to maintain its inclusive values

Source: 2023 Proxy Statement; Institutional Shareholder Services

Oscar Health (Healthcare – U.S.)

• Despite political pressure post-executive order, the Board maintained its culture- oriented initiatives
• Secured shareholder endorsement through transparent messaging and direct Board involvement

Source: Oscar Health Board Materials, 2023

V. Shareholder Support for Values-Aligned Governance

Investor sentiment has shifted toward measurable outcomes and sustainable governance. In 2023:

• More than 60% of S&P 500 shareholder proposals on inclusion, pay equity, or Board composition received majority support
• Asset managers like BlackRock and State Street stated they would vote against Boards lacking diversity or clear cultural alignment.
• Proxy advisory firms (ISS, Glass Lewis) increased their scrutiny of nomination committees without diversity mandates

Boards aligned with clear cultural values—and who can show strategic rationale for their people decisions—are more likely to secure investor trust and defuse activist criticism.

VI. Inclusive Governance in Practice: Expanded Representation Examples

In addition to gender and ethnic diversity, leading organizations are expanding their governance and talent strategies to include veterans, individuals with disabilities, and Indigenous communities. These examples demonstrate how inclusive culture can be operationalized through Board-level sponsorship and organizational alignment:

Veterans

Optus (Telecommunications – Australia)

• Actively recruits ex-service personnel through the Australian Government’s Veteran Employment Program. Veterans contribute leadership, problem-solving, and technical expertise to its workforce strategy

Source: The Australian, 2023

Starbucks (Retail – Global)

• Maintains supplier partnerships with veteran-owned businesses as part of a broader economic inclusion strategy. This initiative strengthens the supply chain while expanding community impact

Source: Starbucks Belonging & Inclusion Report, 2023

Individuals with Disabilities

PPG Industries (Manufacturing – Global)

• Champions neurodiversity and physical accessibility by enabling employees to contribute authentically across roles and teams. Internal metrics show positive correlations between inclusive team structures and performance outcomes

Source: PPG Sustainability & Inclusion Report, 2023

Accenture (Professional Services – Global)

• Operates employee networks and neuroinclusion initiatives focused on creating supportive work environments for employees with disabilities. Inclusion outcomes are tied to leadership KPIs

Source: Accenture Inclusion & Diversity Index, 2023

Gender Diversity

AllianceBernstein (Financial Services – Global)

• Formed a Women’s Leadership Council to broaden female leadership representation and influence across the firm. The council drives talent development and succession planning aligned with Board diversity goals

Source: AllianceBernstein Corporate Responsibility Report, 2023

Avtar Group (Consulting – India)

• Founded Avtar I-Win, a return-to-work network for women professionals. Over 42,000 women have re-entered the workforce through corporate partnerships supporting gender re-integration

Source: Avtar Group, 2023

Indigenous Communities

Various Organizations (U.S., Canada, Australia)

• Companies in energy, finance, and consumer sectors are increasingly partnering with Indigenous-owned businesses, implementing Indigenous hiring frameworks, and offering cultural competency training at the Board and executive level

While more fragmented than other diversity categories, these initiatives signal an emerging commitment to Indigenous economic inclusion within broader ESG frameworks.

Sources: Industry reports; reconciliation action plans (RAPs) in Australia; U.S. Board DEI disclosures, 2022–2023

VII. Summary: Why This Matters to Boards

The evidence in this appendix supports a single, pragmatic conclusion: inclusive environments, innovation- and transformation-ready cultures outperform. Governance professionals who treat culture as a strategic variable—not a side initiative—will better position their organizations to compete, adapt, and lead. These outcomes are not political. They are practical, and they must begin in the Boardroom.