While simultaneously dealing with the COVID-19 crisis marathon that has created short term and medium term risks, which may be impacting on the very survival of their entity, Chairs have also had to lead their board’s to rapidly adopt new technology to conduct board meetings via online video technology (Zoom, MS Teams, Skype etc) and adjust their own chairing practice to accommodate the new online board table meeting.
In a recent research piece on ‘How Chairs prepare for Board Meetings’ VUCA Trusted Advisors captured some insights into how Chairs have responded to conducting board meetings online. The inability to ‘read the room’ and assess emotion and body language are well documented downsides of online meetings. Chairs have responded to these challenges with a number of process changes such as:
- Reducing meeting time and increasing frequency of meetings
- Introducing short breaks
- Having all on mute and one person speaking at a time leads to greater respect and listening to each other
- Increased prioritisation of health and well-being
There are also Board only changes that Chairs have implemented:
- Changing meeting times to be earlier (i.e. late afternoon) as all the directors are at home and often weary after hours of online meetings
- Having procedural matters dealt with by circular motion
- Setting aside any large issues for a single topic only board meeting
- Reaching out to directors after the meeting for an informal debrief and to obtain feedback.
Online meetings have changed the very nature of boardroom dialogue and debate. An area of conscious change in chairing style is to have far more ‘structured Q&A’ with each director given time and being named to respond. Chairs acknowledge that while this ensures every director has a voice and dominate directors are managed, a negative consequence is ‘less open & free-flowing dialogue compared to sitting around a boardroom table’. Some Chairs have observed that in online meetings directors ‘are more concrete in their requests for decisions or actions – pushing things to a vote or decision that might otherwise have been aired’. Some Chairs also note the lack of post meeting small talk and debriefing.
It is unclear if the reduction in dialogue and debate will be detrimental in the longer term. Boards should be wary of complex issues or decisions that affect sustainability of the entity or health and safety of staff and clients not being thoroughly explored and debated. If a Chair observes a lack of debate due to the change in meeting forum to online, they can plan ahead to address this for complex or high-stake decisions. For example, breaking down the issue into sections by creating multiple sub agenda items, developing or posing questions to the Board based on a decision-making framework, or breaking into small groups online to encourage more open discussion and exploration may help with a thorough exploration and discussion by the Board.
The COVID-19 marathon has also simultaneously created new risks and heightened other risks facing organisations. Chairs identified a range of concerns that were ‘keeping them awake at night’. They fall into several categories COVID-19 impacts, employees and emerging risks:
COVID-19 Impacts
The big three that should keep any director awake – solvency, maintaining profitability and minimising job losses. There were a range of other short-term issues identified such as:
- the impacts of a rapid switch to everything being done remotely e.g. fraud
- a breakdown in communication
- falling productivity as working from home fatigue sets in
- the impact of a case in a facility and adverse health outcomes for clients that could have been prevented
- the scale and complexity of the demands on management.
Chairs also identified that Boards have moved on from the immediate impacts of lock downs to consideration of the future. For example, “the outcomes of the pandemic socially, politically and economically; the possibility of long-term economic dislocation and disadvantage” and “The post COVID strategy and how to position the entity to thrive post COVID”.
Employees
CEOs were the most cited staff issue for Chairs with COVID-19 raising concerns for Chairs on the suitability and performance of their CEO, CEO succession and, on a more positive note, how to best support the CEO as they are now even more isolated. More broadly, employee well-being (COVID-19 prevention and mental health) and skills and ability of employees to deliver desired outcomes for clients were also areas of concern.
Emerging risks
Boards are considering their risk environment beyond COVID-19 with a number of Chairs raising a range of emerging risks from cyber-attacks, how to embrace AI and machine learning, rapid technology evolution and COVID inspired regulatory change.
Conclusion
Chairs have responded to the COVID-19 crisis by reflecting on the effectiveness of online meetings and modifying their practice to suit a virtual boardroom. The once in 100 year pandemic induced crisis is also leading to considerable thinking on the short and medium terms risks facing entities. As part of this the pivotal relationship between Chair and CEO has focused Chairs attention on CEO performance and the support they need during this crisis. The COVID-19 pandemic clearly shows that the Board and CEO competencies required for a volatile, uncertain, complex and ambiguous, known as the VUCA environment, are not just nuances but important qualities to assess.
If you would like to discuss a CEO review, Chair support or Board evaluation based on this new VUCA environment, please contact Paul Geyer paul.geyer@vuca.com.au