In normal times, most boards would meet on a quarterly basis to approve minutes from the last month, review current financials and then adjourn for lunch. These are not normal times.
What is the board’s role during crisis
It's a new world and board members have new roles.
CCO: Chief Culture Officer
“What is the culture we’re committing to and how is that reflected in this crisis?” said Julie Abrams, CEO of How Women Lead, a networking group. As managing partner of a board search practice, Abrams coaches many board members on their roles during a crisis. Those companies that can engender goodwill now, will benefit in the post-crisis world and a corporation’s actions and board posture should reflect the culture. For example, Salesforce made a commitment early in the crisis to its employees to continue paying them for an extended period. This action reinforces the culture of valuing employees and building trust. President and CEO of State Street Global Advisors, Cyrus Taraporevala, noted that “an average of 52% of an organization's market value can come from intangible assets such as corporate culture.”
The Prophet
There is an overflow of information but shortage of clear guidance. The board should confirm or challenge key assumptions. The board members are chosen because of their experience, expertise, and strong network. They can leverage their networks to see trends first, and sort the facts from fog and to bring visibility.
The Traffic Cop
“Board Chairs are increasingly playing the role of traffic cop to keep investors and other board members from micro-managing management” reports Doug MacKenzie, partner at Kearney, who leads his firm’s Board Ready offering for women board members and those aspiring to join boards. MacKenzie recently interviewed board members from dozens of public companies. One finding—some board members have been tempted to lean in but are learning to give space for management to operate effectively and efficiently during this very tough time.
The Chess Master
While management is focused on surviving the crisis, the board should be thinking ahead. Should the business consider pivoting its business model? Are there M&A opportunities?
The Relay Racer
MacKenzie interviewed one board member that is the youngest member of that board by 15 years and she is 60! Boards need to think of their role as being a relay race. They will need to be in the position to pass the baton. Succession planning is key. There should be succession plans for the board and key executives. Companies are developing contingency plans if any key leaders may be temporarily or permanently unavailable. To mitigate this and other risks, companies can set up a crisis management office.
Boards are realizing they have new roles to play. They are champions of the company’s culture. They act as visionary prophet and direct board congestion as a traffic cop. They also strategize several moves ahead on the chess board as masters of the game before preparing to pass the baton to the next generation.
