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Cultural Lag of Boards

There is such a thing as a cultural lag in the board room.

"Company law requires boardroom decision making to be parochial but boardrooms are pluralist by nature. It is argued that the way business is done, business contexts and strategic decision making do change over time. Factors bearing upon boardroom behaviour include inter alia preferences for the firm to act or to be seen to be acting in a socially and environmentally responsible manner; that is, to act ethically."

"It is argued that conditions are favourable for the emergence of a more widespread pursuit of social and responsible business within a safe and civil society. Forces driving this emergence are discussed and barriers to its progress are outlined. Challenges for the theory of the firm are raised also."
Business Ethics: boardroom pressures in an age of moral relativism

The slow take up of software, innovations, social networking, cloud computing challenges etc, long after they have been in use is a good example.

The term cultural lag refers to the concept that there is a lag between the introduction of some innovation or new concept and the time it is taken on board. It does not necessarily apply just to technical innovation but can also apply to social changes as well as strategic and management changes. The term was first coined way back in 1922 by the noted sociologist William F. Ogburn in his work "Social change with respect to culture and original nature". His theory of cultural lag inferred that there is a period of maladjustment while the present culture is struggling to adapt to the new.

Usually one can see first a resistance to the new culture. "We have always done things this way, no need to change." Is often the catch cry. After a while the resistance falls away, or perhaps in spite of the resistance or as a result of outside forces, the old culture eventually changes and 'catches up' with the new culture.

According to Ogburn, cultural lag is a common social phenomenon due to the tendency of material culture to evolve and change rapidly and voluminously while non-material culture tends to resist change and remain fixed for a far longer period of time. Due to the opposing nature of these two aspects of culture, adaptation of new technology becomes rather difficult. This distinction between material and non-material culture is also a contribution of Ogburn's 1922 work on social change.

One example of Cultural Lag include Dr. Semmelweis's discovery of the cause and cure of childbed fever. For well over half a century after the discover women were still dying in agony after child-bearing. Eventually the culture caught up to it and an illness responsible for thousands of deaths was prevented. Dr. Semmelweis's discovery was "ahead of its time" and suffered a cultural lag. Other examples include motor cars, aeroplanes, many medical advances and not too long ago Stem Cell research was widely resisted on moral and ethical grounds for many years yet is now widely used.

So Cultural lag is not just a technological matter, it can relate to social and physiological and even psychological areas.

This can be quite apparent in the board room as directors, who have been serving on a board for many years, struggle to adapt to new innovative ways of 'doing things'. How many boards are familiar with and can see the future potential of social networks for their company. A good example here is websites. The World Wide Web was initiated by Tim Berners-Lee in 1991 and from that point websites were able to be constructed and linked together. This opened the door to a presence on the internet. The first website was Info.cern.ch, still going strong by the way, and others followed suit. But it was a long haul before many of the larger companies took up the option of a web site. Even now, twenty years later, you can still find companies that have a cultural lag and do not have a web site.

Boards need to be very cognizant of the fact that there are new innovations and improvisations available on a regular basis and to look towards how these can be included in future planning. This particularly pertains to such issues as, green technology and the environment, the addition of women in the boardroom and health and safety issues. Factors that have often been seen more as constraints than ways to maximise shareholder value. This is a cultural lag as eventually even these boards will be obliged to take up the slack here and incorporate such issues in their strategies.

Cultural lag is something that can be addressed. It does not have to be an emotive or socially resistive issue and, in many ways, reducing ones cultural lag, from a board room perspective, could place one in the forefront of competitors, and that can only be beneficial for all stakeholders.

References:
eprints.usq.edu.au/1401/1/Eddington_Searle_Temple-Smith_AWBMMD.pdf
luc.edu/law/faculty/ramirez/pdfs/flaw_sarbanes.pdf
wikipedia.org/wiki/Cultural_lag


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