Ming Long: Leaders will have to make hard decisions

Ming Long GAICD weathered the global financial crisis as CFO of a large property group. Now she faces the COVID-19 crisis as a non-executive director as Chair of AMP Capital Funds, Deputy Chair of the Diversity Council of Australia and on the board of Chartered Accountants Australia and New Zealand. We talked to Ming over Zoom about how she’s thinking through the issues posed by coronavirus and her advice on getting through this unprecedented event.

AICD: How as a director, on the various boards that you're on, are you thinking through the crisis?

Ming Long: In most organisations, (this is what I've seen within the business community), we are prioritising our people first. So the leadership team certainly are the greatest servants at the moment. They need to understand that there is a lot of fear and anxiety in the community. They need to learn courage right now because that's what our people will need from them.

The second thing that I always think about is our customers and how do we support our customers through this crisis? What information do they need to make better decisions? We are as a board already having discussions about the ethical framework we need to have to support our customers though this, understanding fully that it's probably going to hit our bottom line.

But in the end we want our customers to survive and we understand that it is a very human crisis and we have to be there to serve them at their greatest time of need.

Thirdly, what I am asking every single company I am involved with to do is an analysis of best, worst and the medium case scenarios just so that we understand our current position and the levers we have to pull to help our company survive.

AICD: During the global financial crisis, you were the CFO of a large property group, which you successfully recapitalised. A lot of companies and organisations across the board are going through severe financial distress at the moment. From your experience, what would your advice be to those organisations facing that financial cliff?

Ming Long: You must understand the financial position you're in. You must understand what levers you have to pull.

The worst case model is very important because it prepares you for what potentially is down the line so that it's not as much of a shock.

If it's in three months what do we do, if it's in six months what do we do, it if it's in one year, how do we actually survive that period? Then that's where it's important to understand if it goes longer, what levers do we now need to pull so we can last even longer?

You will see right now cash is king again. If we didn't learn that lesson from the global financial crisis, we are learning it well again. And so there's a lot of work that's being done to preserve cash:

What do we need to slow down? What are critical things that we need to continue? And what do we need to stop doing because we can't do those things anymore.

In the global financial crisis, I sold some of the best assets we had that, if I had a choice I would never have sold, because they were our absolute crown jewels. But I also knew that they were the assets that we could trade at that point in time. And whilst it was painful, it was the right thing to do because what you want to do is live to fight another day. And we did live to fight another day.

My expectation is that whilst organisations are trying to retain as many staff as possible, there will be many circumstances where they have to make the hard decision to help the company survive.

And that's a heartbreaking, absolutely heartbreaking moment to lose colleagues at this time and it's a market that I don't want to send people into. But these are the really hard decisions that we're having to make right now. As a leader you have to face into it. These are the times you step up and show that you have the courage to do the hard things but the right things. But also you have to have empathy and compassion and be kind.

I think in this situation it's important that you are very transparent with everyone. So, being bluntly transparent with staff because with staff sometimes when there's a lot of anxiety, they will assume the absolute worst case scenario. In my past experience, being very transparent with them meant that they knew what was coming. They could prepare for it. They were actually really helpful in supporting the teams that were working on a critical survival strategies. They would take the other business as usual work away from them to allow them time.

You need from leadership right now very clear communication with authenticity so that your staff will trust you. But also with all of your stakeholders, they should absolutely bear no illusion about the position you're in, because in each case they will have the potential to be able to help you as well.

AICD: It will be management teams who are in the front line of dealing with crisis management and implementing business continuity plans. In that context and where things are moving so quickly, what is the role of the board specifically?

Ming Long: We're still here to provide oversight, we are here to challenge, here to make suggestions as we have always done.

But in these circumstances the board needs to meet more frequently because we need to keep up with the management team. All of our meetings as you would probably expect have moved online and they are more frequent. We are physically demonstrating social distancing because we set the tone from the top and we need to be demonstrating the behaviour that we expect of people.

Obviously we are glued to all of the information that's being disseminated anyway on a daily basis. And I'm reading very widely in terms of global responses from different companies, on how they're thinking about this.

We are helping our teams develop the philosophy of response because we cannot be there for every critical decision. What is our ethical framework in terms of how we are going to think and make decisions? At the moment it's a reminder to them of what our values are, reminding them of our purpose because really that's going to be the North Star by which they can actually test their decisions.

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This interview was edited and condensed for clarity.