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Blog: Quote
  • Writer's pictureTara Rethore

Board Leadership in a Crisis

During a crisis, CEOs and C-Suite executives are typically on the front line. Yet, the Board also has an important role to play in supporting them as they lead the company during and beyond the crisis. Importantly, Board behavior and its own operation is a signal for what the C-Suite should (or should not) do.

Certainly, the Board of Directors’ legal duties and fiduciary obligations are durable, transcending any specific set of circumstances. No matter what, Directors decide what’s in the best interest of stakeholders, and then, act accordingly. That means that at any given moment, they are considering the needs of a variety of constituents. And all of that remains true, even during a crisis. Yet, how the Board handles those duties may be different in a crisis; their approach must fit the situation.

In talking with other Directors and executives about how Boards best support their organizations, three things emerged.

1. Guide senior leaders in matching leadership style to the situation.

Everyone has a natural, preferred way of leading. That’s their default leadership style, the one they tap, often unconsciously, in a crisis. The same is true for the Board and its way of interacting with and guiding the C-Suite. Consider: Is this the right style for the situation, right now? And what signal does our behavior or approach send to the C-Suite and the rest of the organization? The Board can adjust its own actions and habits – including how it meets or monitors the situation. Then, help the CEO and the C-Suite to navigate their individual and collective leadership styles to behave appropriately for the situation.

2. Plan for disruption among the Board.

A Board is not immune to disruption. In a systemic crisis, such as a large accident, natural disaster, or pandemic, the Board may find it hard to get a quorum to make critical decisions. That may be a temporary situation, with Board members returning to the team within a short time. Or it may create permanent vacancies. Either way, the Board’s Governance Committee plays a critical role. At best, the Committee has already established clear guidelines for managing disruption among the Board. Then, it’s about careful execution in the wake of a crisis. At worst, the Committee must establish new guidelines on the fly, streamlining decisions to match the pace of the crisis without loss of quality or appropriate oversight.

Planning for disruption among the Board includes outlining specific rules for emergency decisions in the absence of a quorum. How do we handle specific operational impacts? What will we do about incentives? What special programs or strategies do we need to support customers and / or retain them?

Boards also require broader thinking about succession, not just for the CEO, but also for key Board roles. Who is the right fit for non-Executive Board Chair? Who will take on Committee leadership? How quickly might we replace Board members? Seamless succession – beyond the Lead Director – promotes continuity of operations and mitigates a host of risks at the Board level. Seamless succession is also needed for the C-Suite. A Board’s proactive response to its own situation is a powerful guide for management.

3. Look to the future.

The crisis will pass. And when it does, the Board must be ready to move forward, using the lessons learned during the height of the crisis. New skillsets may be highlighted and typically, the cracks in the Board’s foundation (and that of the organization it serves) become quite evident. Rather than waiting for the crisis to pass before thinking ahead, identify those insights now, explicitly. Place them on the Board’s agenda to begin addressing once the crisis mitigation steps are firmly in place and working. That doesn’t necessarily mean waiting until the crisis has passed completely. In my experience, crisis response faces a calm, not unlike the eye of a storm. The calm is that time when people know what to do and are doing it consistently and persistently. While the management team continues that effort, the Board also takes advantage of the calm. They ask guiding questions to help the C-Suite to look to the future.

Above all, the Board needs to model these emergency behaviors and practices for the C-Suite.

In and of itself, the Board’s own reaction to and effectiveness during a crisis may be the most important guide it provides to the company. This means it is even more important for the Board to get it right for themselves.

©2020 Tara J Rethore. All rights reserved. Permission granted to excerpt or reprint with attribution.


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