Boards Stepping Up Towards The Next Normal
2020-07-01 Post from Linkedin
(*) Let's not forget that the Board's role is adding value.
Concerns about C19:
Long-term sustainability of the business model
Challenges the nimbleness and adaptability
WEF: prolonged global recession is the main threat in the next 18 months
Not all businesses shrank; online ordering and delivery grew a lot
Key competitors are joining forces to fight for the industry together
Short term: support the management and help make difficult decisions
Priorities: safety, costs, business continuity, including rapid changes in the business model
Long term: get back to growth
The management has to have an evolving business continuity plan communicated to the Board.
Staff and their families’ health
Staff financial security
Can’t ignore financial commitments and expenses as revenues fall.
Make sure there’s enough cash/loans/etc [not trading while being insolvent]
Current pandemic is not described in any books, hence both the CxOs and the Board have to be adaptable and pragmatic.
Look for changes in business model and for scenarios.
Board helps with navigating the uncharted territory and making hard decisions [supposedly, related to cuts of people and projects]
Much more frequent board meetings
Leadership starts and finishes with an understanding of who your team is and maximise their skills and talents
Boards present the most value when it provides critical oversight, long-term planning and strategic support
Lessons from the pandemic
What have we learned? What will we do better next time?
How must the company change? (incl. people and the ways to do things)
What opportunities are there (e.g. acquisitions)
How does the board consistently be a source of inspiration and guidance to management, without attempting to do their job
Ways of working, strategy and governance
WoW [ways of working]: some companies’ business continuity plans (BCP) involve work from home
Many risk managers didn’t take this seriously.
Board: put the BCP into the risk management agenda —> management starts taking it seriously
Strategy: many companies refuse to change the old ways (which must’ve been on the agenda for a while), incl. extra investments and recalibration of staff skill sets
Singapore: strong reserve accumulated over years
For companies: update the dividend policy towards building reserves
Prepare for the post-pandemic future
Conserve or enhance the capability of companies to rebound strongly
Don’t forget to lift the staff morale