7 QUESTIONS FOR CORPORATE BOARDS NAVIGATING COVID-19

A guide to steering companies effectively through the crisis and beyond. What exactly do effective boards need to do to navigate the current crisis? My recent interviews with chairs and directors turned up seven questions that could serve as a guide.

- STANISLAV SHEKSHNIA

IS OUR EXECUTIVE LEADERSHIP ADEQUATE?

When the scale of Covid-19 became clear, good boards conducted candid and comprehensive discussions about whether the incumbent CEO and other senior executives were fit to lead the organization through the unprecedented crisis. No doubt Abraham Lincoln cautioned against changing horses mid-stream, but keeping unmotivated, unstable, physically weak, or professionally unprepared people at the helm of a company at a time of profound and most likely prolonged crisis is even riskier. I know of several boards that replaced their CEOs in recent weeks after realising the power of the storm and its consequences for the business.

DOES MANAGEMENT HAVE THE RIGHT MANDATE?

A good board that has put in place capable management proceeds to make sure the latter has an adequate frame for action. One board chair explained: “We had three meetings last week to debate how we should adjust the CEO’s goals, authority, evaluation, and feedback process. We made significant changes and we agreed to revisit her mandate in a month.”

Many boards have switched to short-term targets and are reviewing them in weekly or biweekly online meetings. Most boards these days identify cash flow and employees’ health as primary targets of management attention. Many boards have reduced the CEO’s spending authority and put investment projects on hold.

ARE WE SUPPORTING MANAGEMENT EFFECTIVELY?