Board Communications

Experts agree: Governance is the best crisis strategy

Your best defence against a crisis is good governance. Whether it’s a global pandemic, a change in senior management or the complexities of running an international organisation, governance provides ‘handrails’ to keep your organisation upright and on-track.

This consensus was the unanimous conclusion of the speakers at a recent Diligent Institute online governance conference. Conducted under the Chatham House Rule, we’re delighted to present this summary of key points and findings.

The panel discussed three different types of crisis: their responses to the COVID-19 pandemic, managing unexpected organisational change and the challenges of governing a trans-national organisation that operates across multiple locations, timezones and legal jurisdictions.

In all cases, effective governance is critical to an effective response. With staff and public health potentially at risk, not to mention financial performance, global reputation and social licence, organisations should seize every advantage they can. And when it comes to creating business advantage, especially during a crisis, good governance is a proven performer.

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Responding to COVID

The COVID-19 pandemic is different from previous outbreaks, such as SARS and H1N1. It potentially affects every employee from every branch of every organisation across the globe.

Thus, not only has it necessitated adjustments such as remote working and new hygiene protocols, but it has also changed the way most businesses function. Understanding where and how the crisis is putting pressure on the organisation is, therefore, paramount.

Well-established business practices may now be impractical or even untenable; staff, customer and stakeholder needs may have changed (radically, in some cases); and strong governance is needed to guide the organisation through the resulting changes and uncertainties.

Governance, in this case, provides a context and framework for action. Organisations with healthy practices around accountability, communication, transparency and adaptability will benefit greatly.

The last lesson is perhaps the most important: empathy matters. As staff transition to out-of-office work and back again, they’ll need support and empathy from their managers. Managers will need it from executives. And executives will need it from each other.

Related Article: Leadership During COVID-19: Best Practices for Boards and Executives

Managing unexpected change

The panel also discussed instances where unexpected changes, such as a CEO or board member stepping down early, rely on good governance to minimise disruption and make any required adjustments to long-range plans and strategies.

The critical insight was that good processes lead to good outcomes. Communication is vital; having effective processes and protocols in place ahead of time means all relevant stakeholders will be able to participate and make informed decisions.

Similarly, coordination between board members, company secretaries and general counsels is critical, so that relevant information can be shared and considered. Crises move through phases, and boards must be confident in the decisions they make at each turn.

The cadence of information-sharing and conversation will naturally increase. This increase is balanced by the participants’ need to pause and carefully reflect on their positions and decisions.

Finally, senior management needs to be clear on the organisation’s mission and values. If governance provides ‘guide rails’ then mission and values are the ‘North Star’, a fixed point that always shows the way forward.

Related Article: What will drive governance changes in the future?

Governing a distributed organisation

Keeping meetings short and focused can help large organisations to stay on track. This change may require a surprising number of adjustments, for example, re-organising boardrooms to accommodate virtual meeting technologies, or by ensuring that all participants have access to internet connections and messaging, meeting and communications tools.

Additional capabilities such as the ability to vote on motions, execute documents and access board packs are also vital. Especially in situations like the COVID-19 pandemic that potentially impact every employee, such tools should be in place before the crisis emerges.

Managers should also be unafraid to learn from other organisations and business units, both internally and externally. Information-sharing is critical, especially in the current context where organisations are deploying new solutions and finding new ways to structure their workplaces and workforces.

These changes will require organisation-wide input, from the board to IT and HR teams, employee representatives and more. Management must adjust expectations around deadlines and deliverables, and provide support to workers in new situations, such as working full-time from home, perhaps in a makeshift office, rather than from a fully equipped office.

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Final insights

The discussion wrapped up with the opportunity for participants to offer their final insights. After some conversation, three thoughts emerged.

First, taking a proactive approach to deploying solutions – including both new protocols and new technologies – can pay significant dividends. Recognising and remedying organisational needs and process ‘gaps’ before they become a contributor to an emerging crisis will save time, money and stress.

Second, sustainability and social inclusion are no longer optional. Stakeholders and the general public are aware of how organisations respond to whatever crises befall them, and they expect their responses to be measured, reasonable and cognisant of the social context in which they take place.

Finally, trust – in your governance and your teams – is critical to any effective crisis response. If you’re not confident that your people and processes would cope in a crisis, you should act now to provide the resources, tools and training needed to ensure they’re up to the challenge.

To learn more about how Diligent can help you promote good governance schedule a demo. We’d be delighted to assist.

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