Four Ways Your Board Adds Value in Crisis Management
Ameeta Soni, a growth advisor with over 20 years of strategy, marketing, and board experience, shares her tips for helping companies successfully navigate through the chaos.
Just as the COVID-19 pandemic has highlighted the need for companies’ crisis management, it should serve as a reminder of the value of a strong board of directors in transitioning out of chaos. With diverse experiences, historical perspectives, and myriad insights, board members can add real value to a company before, during, and after the crisis.
We can see the value of preparedness in how companies emerged from previous downturns. After the 2008–09 financial crisis, several companies prepared crisis management plans, but few were ready for a “black swan” event with a broad impact on employees, customers, supply chain, and more.
Readying a crisis management plan is a big test, but the board can make it even more robust by pressure testing it and the assumptions.
Here are four ways that a board can add value to your crisis management plans:
1. Risk management — I have seen first-hand that while companies can respond quickly to market changes and pivot their offerings and business models, the board can provide guidance to improve the odds for success. Board members can be particularly useful in scenario planning to gauge what it will take to keep a company solvent and preserve its reputation during times of business disruption. Other critical issues for board members include the mitigation of cyber-risks and addressing the challenges with recruiting, onboarding, and retaining employees, especially in an era of increased remote work.
2. Communications: Boards can help ensure that the company maintains effective and frequent communications with all of its stakeholders, both internal and external, via clear communication channels. These stakeholders include employees, current and prospective customers, suppliers, distributors, regulators, and investors/shareholders. Regular company updates on KPIs for the board promote alignment.
The CEO of a company where I currently serve on the board does a great job providing these monthly KPI updates. Having this information regularly allows us, as board members, to track company performance and focus on strategic discussions in the board meetings.
3. Succession Planning — Boards are keenly focused on keeping the executive bench stocked in case of departures. The COVID-19 pandemic has highlighted the need for leadership succession planning and backup plans further down in the organization. The backup planning is especially critical for younger companies with lean staffing.
A key employee at an early-stage company where I hold a board role got COVID-19. Despite being a small team, the company had taken the time to create a backup plan. They were able to distribute this employee’s responsibilities to other associates without missing a step.
4. Diversity — Increasing board diversity of gender, race, age, and functional and sector expertise, in a manner that is visible to the organization, has cultural, ethical, and fiscal benefits. In challenging situations, board diversity can improve the company’s performance by providing diverse perspectives and enhancing decision-making.
In my experience, I have found that companies with strong boards and well-aligned board/management teams are the ones best suited for transiting crises and emerging on solid footing. What are you doing at your company to engage your board during the COVID-19 pandemic?
Ameeta Soni drives growth for technology and digital health companies as a board member and management consultant. She serves on the Maroon Venture Partners Fund’s investment committee and holds board roles with its portfolio companies HomeBinder, Ompractice, and TOP the organic project. She previously served on the board of PlumChoice, now part of SquareTrade/Allstate.
