The COVID-19 crisis presents a unique opportunity for boards and leadership teams.
It is critical to accept that this is the new reality, and we must focus on operating the company. Your board may want to stabilize your employee base. Your CEO may want to give clear leadership messages to build morale and focus the organization on how to be successful during this unique and extremely anxiety provoking time.
Communicating with employees in a caring and genuine manner and with extremely high frequency (i.e. potentially every couple of days from the CEO) will help ground the global organization, lower anxiety, create confidence, and build a cohesive team that leads to loyalty.
This is the moment when you are actually going to ''operationalize your cultural values'' of respect, inclusion, engagement, purpose, and mission. Reinforce and restate your company's vision. Galvanize the organization on what success looks like and focus on the future.
How you engage is just as important as what you say.
Board & Management Decisions
There will be important decisions that the board, and specifically its compensation committee will have to make together with management. For example, organizations with an hourly staff will need to make tough decisions such as determining if you need to lay them off, offer full pay, furlough them with full benefits, offer ongoing continuity of COBRA, etc. If this does happen, it is critical to re-energize and refocus the remaining employees. Regardless of what has to happen, the company mission has not changed, the trajectory has perhaps been slowed down. Your employees need to hear it from the CEO and all levels of management that everyone is in this together with a companywide commitment to move forward. If your company needs to conserve cash, you may want to come up with creative compensation structures, such as allowing some of the leadership team to take some of their base salary in RSUs. You may also offer this same opportunity for directors to take their directors fees in RSUs to drive alignment and conserve cash. The longer you can conserve cash, the longer you can invest in your employees. Philosophically think of your payroll not as a cost, but as an asset and investment in the company's future. You have unique opportunity to create loyalty.External Actions for the Board & Leadership Team to Consider
Hopefully, you don't need to transition either the CEO or anyone on the Executive Leadership Team. When it comes to position transitions, it creates some interesting issues, which boards need actively reviewing and disseminating. Some other internal questions to ask are:- What is your succession plan in the case your CEO becomes ill/unavailable?
- Is your next in line (''name in the drawer'') the right person to hand the reigns over to in a crisis?
- How strong/ready is the bench?
Internal Actions for the Board & Leadership Team to Consider
Don't forget your internal communications programs; these need to be extremely regular, daily would be most ideal. The compassion with which you treat your employees, and the internal communications you promote within the company, between employee groups will help cement the cohesiveness of your organization. Be analytical, thoughtful, programmatic, and specific to put together internal campaigns addressing the employee concerns that will emerge. Here's what that employees care about is:- Am I going to be paid?
- Does the company have the financial strength to make it?
- Will the company take care of me (and my family) if we get sick?
- How can I be part of the solution?
The Board's Involvement in Assessing Operations
There are many board matters that need to be addressed starting with how the company is reviewing its annual operating plan. Ask management to share their ''plan A'' which may be a neutral plan, ''plan B'' which is a significant slowdown/drop (i.e., minus 30%), and a ''plan C'' which is a worst-case scenario. The board will want to review all of the basic questions such as:- Will you take down your credit line, cancel share buybacks, suspend dividends, pay them or space them out?
- Will you be missing your earnings for Q2, Q3, Q4?
- How will you clearly message your earnings forecast?
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Media Highlights
Environmental, social and governance (ESG) issues have become more complex and multifaceted than ever before. At the same time, ESG continues to ascend on board and leadership agendas.
In this buyer’s guide, we explore what a market-leading ESG solution should look like and highlight the key areas organisations should be prioritising as they embark on their search.