- Diligent and Hawkamah conducted a survey that explores how GCC boards handled crises readiness, decision-making and communications between members of the board during the community lockdowns.
Dubai, November X, 2020 — Based on a survey conducted by Diligent, the market-leading provider of modern governance solutions, alongside their partner Hawkamah, the institute for corporate governance in the Middle East, findings show that 58% of respondents felt that executives were ready to navigate through the pandemic and were more prepared whereas for boards, only 42% were ready to navigate through the pandemic.
Additionally, only 22% thought that the risk committees could deal with the pandemic, which highlights the importance of investing in crises training for board members in the GCC. Moreover, when it comes to the policies and procedures for company operations, 42% of respondents highlighted that the procedures were flexible enough to respond to the pandemic.
This highlights that boards have a unique fiduciary responsibility in overseeing the company and during times of crisis, there may be instances where executives have to make emergency decisions that may impact the company’s priorities which are typically set by the board. Staying abreast of company developments is a balancing act that boards need to make during times of crisis.
The survey was initiated in July 2020, comprising mostly of directors and company secretaries with an aim to explore how regional boards handled decision-making during the pandemic. The survey also explored the perception of these directors and company secretaries on how their companies and organisations responded to the crisis. With the aim of trying to identify good practice, findings reflect on some of the lessons learned for regional boards under stress.
Other findings include that when it comes to leadership communications, 82% of boards were in constant contact with the executives, 71% reported that the lockdown did not have any impact to board operations and 86% of boards had ongoing communication between their board members during the lockdown.
This shows that the lockdown did not affect the way boards communicated and operated since only 25% of respondents noted some challenges with board’s access to executives and 20% of respondents cited insufficient scenarios were provided to the board for proper decision-making.
“During these ever-changing times, with almost 100% distributed work forces, getting the right information to the right people at the right time, securely, is critical to good governance and helping companies endure and thrive. While we have been working with customers in the Middle East to modernise governance, we are excited to see how efficient communications are becoming during times of uncertainty,” commented Mr. Liam Healy, SVP and Managing Director at Diligent.
Additionally, as governments started to implement strict approaches to combat the virus, companies had to implement business continuity protocols as well as critically review their human resource requirements. Most of the survey respondents reported that their organisations implemented teleworking into the operations and generally implemented business continuity plans.
Findings show that 42% of the respondents reached out to suppliers to re-negotiate terms of engagement, while 33% reported reaching out to shareholders, 24% to regulators and 6% to customers. Additionally, another 6% of the respondents also mentioned a revisiting of their company’s business model and focused their efforts at business resilience.
Moreover, those organisations that initially invested in board meeting technology found it easier to meet and collaborate virtually than those that followed a more traditional paper-based approach of board meetings. The greater the exposure that board members had in utilising their iPads, the easier it was for the company secretary to push information into the board portal for better board-level visibility and executive decision-making.
During times of crisis, the board has to be assured that executives are doing all that is necessary to manage any potential risks that the organisation is facing and this can be effectively done through constant contact and communication between the board and the executives. The relationship between the Chairman and the CEO is key. As executives try to battle the crisis head-on and put out fires, the board must make sure that the external relationships of the organisation are intact and fully informed to the extent possible.
Diligent is the pioneer of modern governance, empowering leaders to turn effective governance into a competitive advantage. Leveraging unparalleled insights from a team of industry innovators, as well as highly secure, integrated SaaS technologies, Diligent’s industry-leading suite of solutions changes how work gets done at the executive and board levels. Leaders rely on Diligent to drive accountability and transparency, while addressing stakeholder and shareholder priorities. Its applications also help streamline the day-to-day work of board management and committees, and support collaboration and secure information sharing. Designed for both public and private sector organisations, Diligent is helping to usher in a new era of modern governance.
The largest global network of directors and executives, Diligent is relied on by more than 19,000 organisations and nearly 700,000 leaders in more than 90 countries. With an eye towards inclusivity and accessibility, Diligent serves some of the largest public governing bodies, including more than 50% of the Fortune 1000, 70% of the FTSE 100, and over 150 organisations in the Middle East. More information is available at www.diligent.com.