The often heard board governance adage of “nose in, fingers out”1 is regularly held up as guidance for board members and a caution to them, many of whom are former C-suite executives, that it’s not their job to delve too deeply into day-to-day operations.
But should this hold in this time of a crisis—particularly one the length and depth of which is unknown? The COVID-19 crisis has triggered countless off-cycle board meetings or updates, whether fiduciary or advisory, with management working diligently to provide important information about business operations, cash flow, government stimulus, employee well-being, etc. But how are board members considering their role during this unprecedented crisis?
While all parties agree that a crisis calls for “over communication,” these board updates are often a one-way download from management, who are all too quick to return to fighting fires in the business. The “tyranny of the urgent” quickly squelches any generative board dialogue, which is compounded by the absence of board dinners and other face-to-face interaction that would allow observation of management’s overall demeanor. While board members can witness others’ overload, they are frequently unclear about what they should offer beyond moral support, or even whether to get involved.
Some board members argue this “fingers out” approach is the correct one during a crisis and that board members need to resist the temptation to get too involved; they must allow management to focus on the crisis and its impact on the business. Management often agrees, contending that most board members cannot add much value to managing an unprecedented crisis and that time spent “feeding the board” is time spent away from the business.
We’d argue that in times of crisis such as COVID-19, the stakes are too high for board members not to have their “finger on the pulse” of both the institution over which they govern and its management, regardless of the organization’s experience and track record. While few board members will have deep experience with pandemics, social distancing in the work place, stochastic models, or epi curves, a good board’s individual and collective perspectives are invaluable in problem-solving. Furthermore, the headset of board members during this time must be the survival of the institution, and they may need to help owners, management, and employees know that a trial by fire can be helped by the board’s likely differential experience. The long term can’t be sacrificed in the name of immediate short-term decisions.
In times of crisis, board members can bring a great deal of value to tactical problem-solving and near-term planning that could help management work its way out of crisis mode more quickly. Board members often have more bandwidth and a greater experience set to call upon even in the face of today’s coronavirus. A board’s ability to step back and observe the business’ risk mitigation, stakeholder communication, cash management, HR practices, etc., enables board members to consider the longer-term implications of the crisis on the industry, its competitors, and the institution’s future business model above the fog that management might be experiencing in the throes of current daily fire-drill management.
Here are a few areas that board members might choose to examine—to keep their finger on the pulse—during a crisis, to give the business its best chance of survival on the other side:
— Employee safety and economic interests—Even in the face of cash flow pressures on a business, board members should help management attend to both its responsibility for the health and well-being of all employees and the importance of standing by the company’s values. No short cuts here, however tempting.
— Communication tone and frequency—In addition to reviewing management’s messaging and its frequency, a board can help management think through its communication stakeholder map, which is likely different than in the normal course of business and might include customers, suppliers, trade associations, all owners and beneficiaries, government officials and local community leaders, etc.
— Cash preservation—At the first glimpses of a crisis such as this one, all steps should be made to preserve cash until a “revised” plan, reflecting the current state, can be taken into consideration. Board members can help a management team that has been particularly wedded to its investment plan more nimbly adapt to its new environment and make the best decisions for the longer-term health of the business.
— Contingency planning—In this crisis, we’ve certainly learned that COVID-19 can strike down anyone at any time. Ensuring that there are short-term contingency plans for key members of management and understanding whether board members might need to play a part in these plans is a critical function of the board in a crisis.
— Finding the “silver linings”—A board can step back from the day-to-day of crisis management and look for the silver linings that emerge. Almost every crisis sparks new ideas and innovation. Management is quickly battle tested and while some shine, others disappoint. What once were foundational table stakes are quickly abandoned in the face of unprecedented disruption and unforeseen opportunities. Newly-adapted behaviors and “skunk works” become “found pilots” for any strategic pivot that will likely follow if not already begun, and board members can help management spot these changes as opportunities, so as to avoid a retrenchment to practices that may need to be obsolete, post-crisis.
How are your board discussions in the midst of this crisis? Can you make room for some “heads up” versus only “heads down” time—allowing the board to keep its “finger on the pulse” of the enterprise? If you feel we might be able to help you raise the quality of your board’s collaboration and conversation at this critical time, please contact us at email@example.com.
 Les Dakens, Stever Jacobs. “Nose in, finger on pulse: a new paradigm.” Director Journal. May/June 2015: 34-35.