The role of the board in a crisis

Lessons learnt in China.

When organisations find themselves in a crisis like the current COVID-19 global pandemic, everyone has a role to play in helping to ensure the viability and sustainability of their organisation. This global crisis will be a true test of individual and collective organisational resilience.

I have been at the front of the wave, while living and working in China, and have witnessed many elements of both government and private sector responses to the crisis. These responses are still evolving over the spectrum of the crisis, and vary between geographic locations.

When reflecting on the role of the board in responding to and recovering from a crisis, it is important to first note that this particular crisis is externally driven. It is not an internal issue that has evolved into a crisis; COVID-19 is an external event that is highly unpredictable, with potentially catastrophic consequences for the global economy. This means that boards must engage and lean into the crisis early by setting a new risk appetite, undertaking extensive scenario planning, and reframing their governance structure to be fit for purpose.

Here are some of the key insights I have collected since the start of the pandemic in Wuhan, China in January 2020:

1) Safety – physical – psychological – financial

Prioritise employee safety first, including employees’ physical safety, psychological well-being and financial concerns. The immediate health issues are obvious, and there is plenty of advice from the government. The board’s position on the organisation’s adoption and adaptation of the local legal and policy imperatives should be crystal clear.

What we are seeing is that the enduring nature of this crisis will impact different people in different ways. Consequently, finding innovative ways to keep the workforce connected and addressing the isolation and fear issues should be a priority. A comprehensive employee well-being strategy should be developed and delivered.

2) Decision-making authority and empowering agility

Early establishment of decision-making mechanisms to manage the organisation’s responses during the crisis, with clear roles and responsibilities, is critical. This may be done through the incident management team and/or the crisis management team. Identifying the potential bottlenecks for decision points, and providing sufficient authority and guidance to empower leaders to make decisions is important. Agility is key and the board’s direction is critical here; governance and risk considerations may need to be adjusted to drive an agile mind-set.

3) Stakeholder communications

Communication is a critical tool in any crisis. In the case of COVID-19, it is even more critical and it is essential that the board is overseeing a comprehensive communications strategy. Most crisis communication plans may not have considered the sheer scale and magnitude of disruption delivered by this crisis. Effective internal communication is critical to delivering the organisation’s strategy and support to employees. Ensuring 360-degree communications is essential, with the content shaped and delivered by the organisation’s internal communications department or crisis communications specialists. A key observation with the COVID-19 crisis is that traditional ways of communicating may not be sufficient. Organisations are having to find new and innovative ways to reach their employees, and a broad set of external stakeholders, with a speed and intensity not seen in recent times.

4) Fortifying business continuity

Ensuring business continuity and designing new ways to do business is important. This may require, for example, supply chain re-alignment, and opening new online channels for those businesses that are traditionally more customer focussed. The uncertainty in its magnitude and duration, and the global reach of this crisis, is making business continuity planning more challenging. The board should consider extensive scenario planning for their organisation, including ensuring they have considered the worst possible trajectory and planned for it. The scale and scope of COVID-19 is extremely far reaching.

5) Preparing for the recovery phase

The board sets the tone from the top. While recognising that in Australia we are still very much in the response phase of the crisis, most organisations will by now have implemented their Business Continuity Plan and Crisis Management Plan. Now is the time for recovery considerations and to start to shape the new normal. A key role of the board is to be forward looking and recalibrate the strategy and risk appetite of the organisation. Identifying opportunities in the midst of the many ongoing challenges will help future-proof the organisation. The earlier this planning commences, the better. Organisations need not wait for the government to ‘re-open’ the country for business in order to consider a comprehensive, phased recovery and re-entry strategy. The board can use recovery and re-entry planning as an opportunity to strategically embed a resilience culture through every layer of the organisation.

Mark Carrick has extensive experience in delivering security, crisis management and business resilience programs to organisations globally. He has delivered enterprise-wide crisis management programs for organisations, and has also guided c-suite executives and board members on how to prepare organisations to deal with crisis situations. Mark was formerly the National Capability Advisor on Counter Terrorism Intelligence to the Australian Government’s National Counter Terrorism Committee.