This is a common topic which crops up in my various discussions with businesses from all economic sectors. Their is no available handbook to answer this important question and thinking outside of the box surely seems a plausible way forward. Here are some pointers from my end which I find to be practical advice and which many researchers are finding to be useful in such difficult times. This to make sure that if you are a Director you are actually helping your organisation rather than bogging it down in such a crisis situation.
Don’t increase management’s burden
Your CEO and the management team are under huge pressure to handle the rapidly evolving and potentially escalating issues the crisis is throwing at them. What management needs most from the board right now is a strong mandate to handle short-term actions and directors’ support as it makes difficult decisions. But I see many boards heading in the opposite direction, requesting weekly updates—even though senior management finds these meetings of limited value. Such meetings may, of course, be required for some organisations that face a clear and present danger (such as a liquidity shortage) or an urgent, institution-altering decision (such as accepting a government’s support package). For most, though, these interactions divert precious management time that should be spent on handling the crisis and planning ahead.
Instead, a board should urge management to develop a strategic crisis-action plan that would guide the organisation’s response across all relevant time horizons and simply request the same standard reports on the up-to-date scenarios and actions that management reviews. These reports will keep the board abreast of the major issues the management team is working on, what scenarios it is considering, and what actions it is planning to take. If needed, the board can intervene and request more information to stress-test the plans, but even these interactions will then, by definition, be more focused and deliberate.
Increased management capacity
During the heat of a crisis, time is precious, and management teams are forced into trade-offs between handling the immediate action plans and communicating with stakeholders. This is one area in which a board can provide valuable assistance. Specifically, boards could take on the task of interacting with shareholders, governments, regulators, debt holders, employees or even major customers. Many boards have directors with various experiences with legal, regulatory or financial knowledge and thus could pair up with senior managers to meet regulators, banks or major clients for discussions of the organisation’s pandemic response, giving the CEO much needed flexibility. Naturally, it is critical that the board and management team explicitly agree on who engages with which stakeholders for what purpose.
Frame the post-crisis strategy
While management teams focus on immediate survival or planning for the reconstruction phase, board directors should leverage their experience, professional networks, and industry understanding to outline how their organisations’ future vision, strategy, and corresponding operating model may need to change in the post-pandemic era. Developing such a perspective now will enable a board to challenge short-term management actions constructively while providing a foundation for the strategic review that most organisations are bound to undertake in the wake of the crisis. This big-picture work will help management develop an organisation’s posture and broad direction of travel—the vision of the future and the big thematic ideas that will guide its strategic response. Management can then start to pursue that direction when it emerges from the tunnel of the crisis, once uncertainty diminishes and the next normal becomes clearer. This is probably the area where boards can add the most value in guiding their organisations through the crisis. Strategy definition is the job of the management team, but the board can provide a clear and compelling frame to help accelerate the process.
At EMCS (www.emcs.com.mt) we help directors discuss the issues they face to make sure they can add value on the boards they sit upon. Moreover, we also help those businesses who do not have the luxury of a deep and experienced board and thus we serve as an external guide to such businesses who many times have a blurred demarcation line between senior management and directors Feel free to ask for help by dropping me an email on email@example.com