Part 7 of “Ask A Director: What Lessons Have Boards Learned from COVID-19?”
Diligent Institute conducted extensive interviews with over two dozen experienced directors from different sectors, geographies, and backgrounds on how modern governance practices and behaviors are changing in response to the pandemic and its impact, which boardroom changes might be permanent, and directors’ most important lessons learned. In our culminating segment, we provide a compilation of director responses to questions about what their biggest takeaways from the pandemic were. Read the full report here.
No matter how bad the crisis, companies have an opportunity to learn from their responses and improve. Directors are already thinking about the next crisis, what they can take away from COVID-19, and what it means for their company and long-term strategy going forward.
Panelists:
- Debbie Alvarez-Rodriguez: Recology
- Danièle Bergeron: Colabor, Prompt Innovation and Patrick Morin
- Anna Catalano: Willis Towers Watson, Kraton Corporation, HollyFrontier Corporation, Frontdoor, Inc., and Appvion
- Roy Dunbar: Johnson Controls International PLC and SiteOne Landscape Supply. Inc.
- Mohamed Radwan: Platinum Partners
- Lea Ray: Patriot One Technologies Inc., Aleafia Health Inc., ProDemnity Insurance Company, and RFA Bank
- Ted Senko: Autoliv, Inc.
- Jim Treadway IndeCorp and The Tug McGraw Foundation
- Sam Weiss: Altium Limited
Take a Moment to Evaluate
Before directors can adapt their strategies and responses, they first advise a moment of reflection.
“Take stock in how pandemic management has gone. Talk about how you managed it, take a post audit. This type of crisis will not be a onetime occurrence. Learn from what happened and take a look at what you did right, what you did wrong, and what you would change. This will help mitigate risks down the road.” -Anna Catalano
“Even in the midst of the pandemic and social unrest, we have an opportunity as boards to regroup and rethink. What are the most important things that we need to focus on? Knowing that management is trying to keep things running, use this time to think about becoming more agile, accountable, and understanding the scope of risks and rate of change surrounding those risks. We actually added some extra time to our board meetings to spend more time with each other. We carved out times for our deep-dive sessions. At every meeting, we allocate an hour to talk about strategy and the future. We have been working as a board to look into best practice and checking in with Diligent Insights, KPMG, NACD, and other sources of high-quality research.” -Debbie Alvarez-Rodriguez
Focus on Fundamentals
In the midst of a crisis that can make the business environment seem unrecognizable from day to day, directors believe in the value of adapting established governance fundamentals to the new normal.
“You have to focus on the fundamentals. Do you have the right management team and relationship with them? Do you have transparency? Focus on the management team, focus on proactive strategy, stay focused on the business. You should have a team that understands the risk management process. Take stock of your situation and look for ways to stay flexible and take advantage of the silver linings of COVID-19 with long-term strategy in mind.” -Ted Senko
“Our biggest find was switching from best practice to best thinking. We had to return to fundamentals. We used to refer to best practices whenever we ran into a challenge, but now we have pivoted toward best thinking when problem-solving. We are also going to change the way we look at the skills our board has and what skills our board still needs. We need to make sure we are developed correctly.” -Mohamed Radwan
Be Proactive
Directors urge vigilance and thinking about what comes next instead of resting on one’s laurels for successfully navigating the pandemic.
“We stayed out front. We were talking about it in early January, so we were able to get out in front of it. Everyone else started talking about it in March. By virtue of our industry, we were aligned with the medical community, skilled nursing, and hospitals that we were on top of the pandemic. Taking advantage of communication channels and building the necessary relationships were important for us.” -Jim Treadway
“The skills corporate leaders need for the next business cycle following the disruptions of COVID-19 may not be the same as the recent past. Boards should carefully consider whether among the C-suite and the directors, the right skills, commitment, and passion are present to lead the next phase of transformation, as winning companies will not look the same as they did in 2019.” -Roy Dunbar
Use the Opportunity for Transformational Change to Your Company’s Advantage
The pandemic presents a watershed moment for many companies. Directors advise that boards should accept and embrace opportunities for systemic change and use moments like these to explore new avenues for value creation.
“I think the pandemic has opened everyone’s mind to change. People always want change, but when it’s time to change, everyone’s afraid and they go back to their old ways of doing things. This pandemic has helped raise awareness of the need for necessary change. It has helped some of the boards I’m on make quicker decisions and explore new avenues to doing business and creating relationships and strategic partnerships that they otherwise would not have thought of. It’s the role of the board to generate that level of awareness, and challenge management to do things differently and support them.” -Danièle Bergeron
“You have to be willing to let management take some risks and try something different. The world changed. If you try to stay entrenched in old ways of thinking, it probably won’t work. Nimbleness is a mindset. For the most part, I saw people jumping on board with good thinking. You can’t get entrenched, and you’ve got to keep an open mind. Make sure you have diverse sets of skills and backgrounds around the table. Meet frequently on issues. Things can’t wait during a pandemic, and they still can’t.” -Lea Ray
“We accelerated our move to a cloud platform, which has caused us to change how we apply our engineering and R&D resources. The pandemic gave us the courage to make a big strategic change to the company, at considerable risk, but we felt there would never be a better time to do it. It was the right decision for the long term.” -Sam Weiss
>>Return to Part 6: What Response to COVID-19 Makes Directors Proudest of Their Organizations?
>>Return to Diligent Institute.
