What Corporate Crisis Responses
Made Directors Most Proud?
Ask a Director Series, Part 5This is the fifth of a five-part virtual panel series from Diligent Institute: 'Ask a Director: How are Corporate Boards Responding to the COVID-19 Crisis?' Learn more about the series here.
- Philip Aiken is Chairman of Balfour Beatty plc, Chairman of AVEVA plc, Non-Executive Director of Newcrest Mining Limited, Director of the Australia Day Foundation, and Director of Gammon China Limited.
- Eileen Kamerick currently serves on four boards: Associated Banc-Corp. (NYSE), Legg Mason Closed-End Mutual Funds (NYSE), Hochschild Mining, plc (LSE), and AIG Funds. She chairs three audit committees and one corporate governance committee.
- Claudia Fan Munce is currently a Venture Advisor at NEA, as well as a board member at Best Buy, CoreLogic, and Bank of the West/BNP Paribas.
- Jamie Orlikoff is currently the Chairperson of the board for the St. Charles Health System in Bend, Oregon. He is also President of Orlikoff & Associates, Inc., a consulting firm specializing in healthcare governance and leadership, strategy, quality, and organizational development.
- Yiannis Petrides is a board member at Mytilineos S.A., a leading industrial company listed on the Greek stock exchange, and involved in the Energy and Mining sector. He is also a board member at Puig, a privately held company operating in the world of fashion and prestige fragrances, with a brand portfolio including Carolina Herrera, Paco Rabanne, Nina Ricci, and Jean-Paul Gaultier.
Our panelists shared some lessons learned from the coronavirus crisis.In a crisis at the scale of a global pandemic, the situation can feel daunting and hopeless ' particularly as governments around the world provide unclear and inconsistent direction on how to respond that differs from the guidance of public health experts. At times like these, organizations can be most effective when they focus on what they can achieve and how they can most help. The panelists shared their reflections on their companies' responses to COVID-19 about which they felt most proud, the lessons learned for future crisis responses, and how to come out stronger on the other side.
Play to Your StrengthsDirectors shared how their companies stepped up and joined the effort to fight COVID-19, and the stories highlighted how different business models led to different interventions. Some companies have been able to contribute using an existing supply of goods. Claudia Fan Munce shared a great example from one of her companies:
At Bank of the West, we had previously provisioned a large reserve of N95 surgical masks because we serve so many communities impacted by the California fires, not just for our employees but for our customers in those communities as well. When the shortage of PPE [personal protective equipment] in the hospitals became evident, the CEO took the lead and donated them to the hospitals, like Kaiser Permanente, San Francisco General, and two hospitals in Seattle. How can you feel anything else but pride in being on this board?Other organizations can pivot and utilize their operations to create much-needed medical supplies, healthcare equipment, or household staples. Yiannis Petrides provided an example:
I'm on the board of one of the largest producers of fragrances in the world. We've taken our largest plant, which is located in Spain, and we converted it to produce sanitizing gels. These gels are in short supply, so we are donating them to associations in need and to the Spanish government. We did that as soon as the crisis arose because it was an opportunity to contribute in our way.Meanwhile, many companies operate in sectors that can't convert operations to contribute to the COVID-19 response. But as Eileen Kamerick made clear, those companies still have an important role to play by providing critical financial support, in the form of relief to heavily impacted communities and through donations to the researchers and scientists fighting to improve treatment and find a cure:
One of the companies I'm on the board of has mining operations in Peru, and we made a contribution to a Peruvian university that is working to find ways to use technology to combat the virus. It's great and important to give money to provide relief, but it is also great to give money that could help produce a technological breakthrough. Companies are asking, is there a way we can pivot our business to help? For example, Ford and GE Healthcare are working together to create ventilators. In this case, we are not a technology company, but we can help provide resources to the university doing that work.
Communicate Clearly, Frequently and HonestlyCommunication is key in any crisis ' and in any model of good governance ' but a global pandemic only heightens the criticality of clear, frequent, and honest communication. Panelists were proud of their organizations' efforts on this front. Healthcare workers are on the front lines of this crisis, and they need everyone to help support their efforts. Jamie Orlikoff described how executives at the healthcare system he chairs fostered a deeply meaningful partnership with the community they serve by tackling the tough conversations:
I'm proud that our leaders were willing to play 'the heavy' in the community. There were very significant political implications of holding the public accountable and encouraging self-isolation. Oregon was not one of the first states to issue a shelter-in-place order, and the one that our governor did issue is still lukewarm. We became the sharp end of the spear in terms of flattening the curve. Our executives got very aggressive going to the media and sending a stronger message. They really communicated to the community both 'We are in this together with you' and 'If you want the healthcare system to be there for you, then you need to be very thoughtful and start sacrificing short-term pleasure for the long-term gain of the whole community.' That is a very difficult message to send, and I'm deeply proud of our organization for sending it. And actually, the community really picked up on the underlying sense of partnership in our communications ' once shortages of PPE [personal protective equipment] were picked up by the media, our community has been stepping up and we've been getting tons of donations. It was a great example of how powerful it can be to build a partnership with the community in which you operate, and it happened because of us delivering a tough message.Panelists consistently emphasized that providing for the safety and health of their employees is a top priority. Philip Aiken took it a step further, articulating the importance of open communication from a company to its workforce as a safety measure:
We have been very good at keeping our employees involved with where the company is. I wouldn't exactly say I'm proud, because it's what we should be doing, but I do think it's one of the most important things to do during this crisis. People right now are looking for security, looking for information, and there is nothing worse than people in this environment being left with uncertainty. One thing I've really tried for is to make sure we are very open with what we're doing day in and day out. This is a time where you have to think about what you yourself can influence, and at a company, it's your employees that take No. 1 priority. I would hope our employees feel that we've been doing a good job on that front.Sometimes crisis communication is as much about tone as it is about tactics. Fan Munce put it well when describing two of the companies on which she is a board member:
I have been proud to witness how these companies are composed of caring human beings as the humanity of these CEOs is shining through, even though there are big brains behind it all. If you read the letter the Best Buy CEO sent out to customers, you can almost feel the pain she shares about the impact this virus has on people's lives. The decision to keep the stores open initially was more focused on how best to serve communities that need connectivity to stay safe working remotely than on the sales. The letter in the proxy of CoreLogic has the same caring tone about its employees, many of whom are deemed essential workers.
Avoid Wishful Thinking ' Let Information Guide DecisionsIndividual decision-making in the face of a crisis is often hampered by emotional reactions to the situation ' hope, fear, anxiety, sadness, and wishful thinking aren't particularly helpful in making tough judgment calls. Yet organizations are led by individuals, and so leadership-level decisions can be susceptible to this same trap. Orlikoff was proud that his healthcare system listened to the information available and moved forward based on it:
I'm proud that there was no wishful thinking in our response to this crisis. It was an immediate application of data analytics. We took the predictive curves and looked at the best-, moderate-, and worst-case scenarios for when we would likely experience maximum demand, experience a surge, and be overwhelmed. That data gave us the ability to notify the community and adjust operations very dispassionately. For example, it informed the decision about when to cancel elective surgeries and procedures because we knew how much lead time we would need to get ready, and that we had to ensure there was minimal exposure risk to our caregivers and patients. The data drove all of those decisions. So the first step is having access to that data; the second is effectively using it to model likely outcomes; and third is actually having those models serve as the driver for decision-making.>>Return to Part 4 of 5: What Are the Best Practices for Virtual Meetings? >>Return to Diligent Institute.
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