Top Considerations for Boards During COVID-19

COVID-19 has had a massive impact on businesses, people and livelihoods worldwide. For many board directors, it is critical to remember that despite the uncertainty one thing remains sure: the crisis will eventually end. And businesses that hope to grow in the future must consider the responsibility they have to their customers, employees, and communities today in order to emerge healthy. Here are a few considerations you should keep in mind in the boardroom over the next few months:

Operations

At this time, the board may need to meet at short notice yet the ability to gather in person may be limited by public health restrictions. As a result, you may wish to opt for virtual meetings. To make virtual meetings more effective, turn your video on to encourage interactive engagement and send materials in advance to enable participants to take full advantage of the meeting by thinking about the content ahead of time.

The board should also assess relevant applicable quorums required for a decision and the current composition of critical committees (such as the audit and risk committee) in order to take contingencies if certain members should be unable to perform their duties.

Management should present the board with a clear picture of any supply chain risks to forecast any anticipated shortages or needs for pricing adjustments.

Strategy

The board should ensure that management is considering both short- and long-term risks, as well as opportunities. Business continuity forms a key part of risk management, one of a board’s core responsibilities, so the board should be sure that contingency plans are in place and there is an effective communications strategy.

Finances

Many governments and regulators have taken steps to provide financial relief to employees and customers. The board should assess whether the direct or indirect impacts of these measures have been taken into account in financial reporting and risk modeling.

Moreover, if the board of directors suspects that the company is over-indebted, it should draw up an interim balance sheet and submit it to the auditors for examination

Risk

While risk may be typically assessed semi-annually, the rapidly changing landscape due to COVID-19 requires that companies reassess their risks more regularly. Boards hold the ultimate responsibility for ensuring that risk management systems and controls are established and maintained and that executives charged with day-to-day operations can execute their duties.

In order to avoid any surprises, the board should ensure that reporting protocols are in place to provide the board with regular updates on business performance and compliance with swiftly changing government policies. As a board member, ensure that you are up-to-date on pertinent areas such as health and safety, human resources, cybersecurity, supply chain management and other areas that may be stretched at this time. If you spot any deficiencies across these areas, develop an action plan to address them immediately.

Community considerations

The board must ensure that the firm has a clear approach to determine whether it will deviate from its standard approach to managing customer communications and has a clear framework of principles to guide such decisions. You should also ensure that you have a strong understanding of how services for customers will be provided in the short and longer-term scenarios.