COVID-19 Response: Elevate Your Board’s Priorities
How to determine your board’s priorities during the COVID-19 pandemic? Your board had and still has three priorities:
- Leadership – people questions
- Strategy – planning issues
- Execution – monitoring performance
What has changed is what your board should emphasize within those three priorities.
Your Board’s Leadership Priority
Leadership questions tend to be long-term. Example: Selecting the CEO has long-term (10-15 year) impact. But with COVID-19, some emphasis within the Leadership Priority has shifted as these other important Leadership decisions demonstrate:
- What is your company’s executive succession plan – both emergency (e.g., CFO contracts COVID-19) and long-term (e.g., EVP of HR plans to retire in 3-5 years)?
- How should your board evaluate and compensate your CEO, including for your CEO and team’s handling of COVID-19 at your company?
- What are the risks in your company’s compensation system? How has COVID-19 changed those?
- Does your board have the right combination of directors to oversee your company through COVID-19 and into the future? What tenure or age limits should apply to your directors? What perspectives or experience should be recruited?
- What workforce policies can help to build a specific corporate culture to best respond to new challenges?
- What adjustments should your company make to adapt to COVID-19 workforce impacts including enhanced workplace safety due to COVID-19?
When making these Leadership decisions, your board is the main actor. Your management researches and advises your board on these questions.
Your Board’s Strategy Priority
Strategy questions (e.g., your company’s strategic plan) tend to have a medium-term time horizon (3-5 years). These questions require your board and management to work collaboratively. Your board cannot develop the first draft of your company’s strategic plan. Rather, management must propose a vision and path to move your company forward. Before approving your strategic plan, your board challenges management’s underlying assumptions, methods, and goals; debates the projected impact – including of COVID-19; and reviews every business unit’s major drivers. COVID-19 requires that your management and board revisit your company’s strategic plan in light of new opportunities, risks, and impacts. The desired outcome: your board approves an updated strategic plan that can carry your company through COVID-19.
Other important Strategy questions – with a COVID twist added – include:
- How will your company grow? At what pace – factoring in COVID-19?
- Into which new businesses or geographies should your company expand? Will COVID-19 slow expansion plans?
- What are your company’s biggest risks (and how is your company mitigating them)? What additional risks has COVID-19 added or increased (and how will your company mitigate them)?
- What new products or services should your company offer? Has COVID-19 reduced the viability of previously planned product launches? Are there opportunities for your company in COVID-19?
- Which of your existing products are at risk from COVID-19 or other product substitution, rather than direct competition?
- How have recent events changed your investors’ expectations regarding your company’s governance practices, employment practices – including equality, and ESG? Is your company adjusting to reflect those expectations?
- How well is your company engaging with the investment community and other stakeholders and adapting for COVID-19?
Your Board’s Execution Priority
Execution agenda topics tend to focus on tactics and results. The time horizon is short-term — this quarter, this year. Profitability and disclosure are typical execution agenda topics. Right now, your management is spending a good deal of energy on COVID-19 and equality. Here, your management is the main actor, running your company. Your board operates with their “noses in but fingers out,” monitoring performance. The board receives and reviews scorecards, including COVID-19 impacts, and watches carefully and questions where warranted.
Your Board’s Three Priorities Inform Each Other
Each of your board’s three priorities (Leadership, Strategy, and Execution) inform the other two. For example, Execution agenda topics inform your board’s evaluation of management’s ability to deliver generally and specifically in the face of COVID-19. Certain Strategy agenda topics inform the evaluation of your management’s ability to think longer-term and to set a course that will guide your company through and beyond COVID-19. Some Leadership agenda topics determine which strategies have realistic goals in the face of COVID-19 and guide your board as it sets performance metrics for your management compensation in the Execution priority.
Upcoming Board Meeting Agenda Should Prioritize Leadership and Strategy
By overemphasizing Execution agenda topics during this COVID-19 crisis, your board and management might skew your board’s time-horizon to the short-term. Thinking that your board should focus solely on COVID-related agenda topics will starve the Leadership and Strategy agenda topics that will guide your company during COVID-19 and generate long-term success for your company.
The Foresight® Solution
Using Foresight to plan your board and committee meeting agenda can help your board and management identify and elevate your board’s priorities and the agenda items that can drive your company’s success – in the face of COVID-19. Foresight’s agenda planning tool can also help you avoid misspent board and management time as well as highlight gaps your management and board should address to gain the maximum impact from your board’s efforts during these challenging times. For additional information about Foresight, click here: https://foresight.board-ops.com/
© 2018-2021 Corporate Governance Partners, Inc.