Intercultural competence for better decision-making in governance

Many institutions have a conscious strategy to bring diversity to their boards. This might be diversity of gender, age, culture, ethnicity, race, nationality, sexual orientation, ability or experience, to name a few. Building a diverse board signals that the institution values different voices and perspectives and board composition better reflects the diversity of the organisation's stakeholders, workforce and client base.

The next step for the board is to understand, navigate, and use the diversity of its members to create a shared and agreed-upon culture that supports its ongoing work of implementing the organisation's strategic and fiduciary objectives.

But, how well do we understand ourselves and what influences the way we behave, collaborate and contribute to a board, or indeed any team to which we belong? A key influence is our cultural background, and it is culture and the development of intercultural competence that is the subject of this article. 

What is culture?

Broadly speaking, culture is the shared ways of thinking and patterns of behaviour that distinguish one group from another.

As individuals we are the sum total of our:

• Background: our culture, language, history and context of our community, how we were raised by our parents or caregivers
• Experiences: interactions with humans (family, friends, social media) and institutions (like the legal or social welfare systems), education, and travel
• Perspectives: the lenses through which we view the world which may be influenced by culture

Understanding our own culture and how it influences our behaviour and way of working as a board member can help us bridge diversity and focus on where difference needs to be more deeply understood. Building cultural self-awareness and then an understanding of culture general frameworks can help us make sense of, and more fully attend to, cultural and other differences. Developing cultural self-awareness and intercultural competency allows a board to identify and leverage the strengths and diversity of its members, positively impacting the quality of governance. 

What are culture general frameworks?

Culture general frameworks are those that can be applied to any culture, and those that every culture addresses. Examples might include how direct or indirect communication is, how a culture thinks about power or how individualistic or collectivist the group is.

Consider the culture general frameworks of power and decision-making when reading the following example. Think about these questions:

• In your culture (and in your board culture), is decision-making more egalitarian or more hierarchical, where decisions are made at the top and handed down?
• Is there deferential respect and trust shown by stakeholders towards the board, or is the board judged by how well it performs its role and gets results?

An example of cultural competence in board governance

An organisation in Hong Kong has a two-tiered board structure with the Founders' Board holding the power to nominate and appoint members of the Executive Board to which the CEO reports. The Founders' Board is a homogeneous group of highly respected, mostly male members of Hong Kong society who hold senior positions in well-known companies across the city.

Initially the institution was established to serve a mainly Hong Kong clientele and the staff and client base trusted the Founders by virtue of the respect and power they individually commanded in society, and personal relationships that had been developed.

However, over time the clientele changed to a more global audience, mostly from western cultures, and they wanted more communication from the Founders, transparency around decision-making and accountability processes. Trust that the Founders were making the right decisions for the organisation would only be earned if the Founders communicated and demonstrated that their strategies were in the best interests of the organisation, its mission and strategic objectives, and positive market results provided evidence of this. Receiving little information from the Founders' Board and the distance to the seat of power seen as out of reach, resulted in a lack of trust, confidence and ongoing questioning of the Founders and their processes by stakeholder groups.

This example highlights a shift in thinking about the culture general frameworks of power, building trust and decision-making . One of Geert Hofstede's 6 dimensions of culture is power distance. This is the concept that less powerful members of an institution accept that power is distributed unequally.

In the early days of this organisation, the mostly Chinese stakeholders and clients trusted the Founders based on personal relationships, reputation and standing in society. There was acceptance that power was based with the Founders who had the wisdom and experience to make good governance decisions. The shift in the cultural background of stakeholders more recently to a majority being from North America means that trust in governance and leadership is typically believed to be earned through demonstrating competence and providing evidence-based results that the roles and responsibilities of the board have been fulfilled. Working with a consultant, the board analysed and understood this change in cultural approach to giving or earning trust and the desire for transparency in decision-making processes. Understanding that these culture general frameworks may be approached differently depending on cultural background meant the Founders' Board could address the issues. The Founders still had the trust of the Chinese stakeholders based on relationships and reputation, however by communicating more regularly and explaining processes of decision-making they earned the trust of the more task-oriented North American stakeholders.

The culture general framework of communication

Now let's consider the culture general framework of communication. Every culture communicates but how and when can vary.

Consider these questions as you read the following example:

• In your culture, do you communicate directly, simply and explicitly, choosing words to clearly and precisely share meaning?
• Or perhaps your communication is more indirect, sophisticated and nuanced; the listener must listen to what's not being said as much as what is being said?

Over the past five years, this board has been intentionally appointing members to better reflect the stakeholder profile of this international organisation. The board is now a diverse group of ages, cultural and linguistic backgrounds, gender and experience. The native English-speaking board chair from Australia has noticed that some board members contribute more frequently by asking questions during the CEO's report, correcting information that is not accurate, and offering ideas to the generative discussion. Other members are consistently quiet and listen politely, only contributing if invited to do so.

Discussing these observations with individual board members, the board chair learned that board members from more collectivist cultures considered it more important to be part of a harmonious group, rather than to express one's individualism. In addition, in collectivist cultures when someone is incorrect, it is considered better to address this indirectly and allow the person to save face. The other important learning was that the purpose of the board meetings was unclear. For some board members, typically those from a more individualistic culture, the meeting is seen as a time for questions and discussion to make for more informed decision-making. For some board members, typically those from a more collectivist culture, the meeting is not a time to question or discuss but rather to show respect to those who have prepared reports and documentation for the meeting and to listen carefully, especially to the most senior and experienced board members such as the board chair.

This example highlights the culture general framework of communication including meeting purpose and etiquette. In this case, the board chair recognised the need for a shared and agreed set of norms for meetings and collaboration.
Better understanding one's own cultural influences on the ways we communicate and for what purpose, can contribute to understanding the communication preferences of others, and build intercultural competency. Developing a cross-cultural set of meeting norms was the solution that helped this board to function more effectively. 

How do you develop intercultural competency?

By understanding how culture impacts the way one thinks and behaves, and by extension, why a board member contributes in the way they do, we can build cultural self-awareness and develop intercultural competency. Intercultural competency goes beyond understanding how culture influences the way we think and behave, to "building the capability to shift cultural perspective and appropriately adapt behaviour to cultural difference and commonalities".

Extensive research has been conducted into the development of intercultural competency and its importance in recognising, navigating, and bridging cultural difference. This is particularly important as boards leverage the diversity of their members to function effectively and positively impact the institutions they govern.

Erin Meyer, a professor at INSEAD business school, is the author of The Culture Map: Decoding How People Think, Lead and Get Things Done Across Cultures. Her eight culture map scales represent the range of culture general frameworks, and "by analyzing the positioning of one culture relative to another, the scales will enable you to decode how culture influences your own international collaboration" (Meyer, The Culture Map, p. 16). Erin Meyer's website, has a range of tools including a mapping tool, that can be useful for boards to map the cultural preferences of its members in an effort to better understand the strengths and opportunities that the diversity of its members offers.

Another tool available and widely used by non-profit organisations, educational institutions, corporations and government departments is the Intercultural Development Inventory (IDI). This is a 50-item questionnaire, available in multiple languages, taken by more than a million people across cultures worldwide, that provides a baseline assessment of one's intercultural competence. It has been determined to be statistically valid and reliable and to have no cultural bias. Individuals and groups gain insight into their approach towards cultural commonality and difference, and can develop a personal or group plan towards building intercultural competency.

Developing a culture of collaboration 

A board may intentionally diversify its membership to better reflect its stakeholder profile, to encourage and engage with different perspectives and voices, but it is critical to understand how culture impacts the behaviours and thinking of board members. Being curious and understanding cultural commonalities and differences will enable the board to develop cross-cultural strategies and an agreed culture of collaboration and operation so that the strengths that diversity brings can be harnessed to ensure the board is effective and high-functioning in serving its stakeholders.