BALANCE FROM THE BOARDROOM: STEWARDSHIP IN A CRISIS
During a crisis, such as the ongoing coronavirus (COVID-19) pandemic the world is currently facing, people will look to leaders for answers. In a corporate context, companies under threat expect the board to step into the breach and provide steady stewardship.
Certainly, COVID-19 has reinforced the importance of good governance and sound decision making – the pandemic’s inherent unpredictability requiring board members to oversee crisis response plans and adapt them as new factors and scenarios present themselves. Moreover, they also need to envision the impact of decisions made, or not made, today and whether these constitute a regulatory issue.
According to Protiviti’s ‘COVID-19: Paradigm Shift in the Boardroom’ report, while chief executives focus on managing the crisis, directors are having to approach their advisory roles in ways they never have before – both physically and intellectually. Companies with business models dependent on herding and crowd-gathering, including sporting events, concerts, movie theatres and restaurants, are focused on survival, and many may emerge from the pandemic as shells of their former selves.
Whatever the circumstances a company may face, paradigms are changing in the now largely virtual boardroom, states the report. Indeed, the fundamental assumptions of directors, chief executives and executive teams about markets, customers, supply chains, the workplace, technology and other factors underpinning the business model are undergoing a monumental sea change.
“COVID-19 has produced, and still produces, a huge range of challenges for companies,” says Mark Wesker, a partner at Osborne Clarke LLP. “These range from the health and wellbeing of staff and the very viability or solvency of the business, through to operational matters, such as strained supply chains, health and safety and, particularly, data protection and information security.”
Jan-Mar 2021 Issue
Fraser Tennant