So much has already been written about the challenges Boards and organisations have faced during COVID-19. Even more has been written about how Boards can interact in the virtual environment. Indeed some writing has occurred with regards the ‘new world’ Boards will be challenged by post COVID-19. Yet little seems to be written regarding the new role and requirements of the Board given the intense social fracture that COVID-19 has created, or possibly compounded, both nationally and internationally.
Boards have historically focused their role as one of governance and accountability. While central to the needs and expectations of the shareholders and stakeholders of the organisation, they have tended to be process and systems focused often with variable results. Recognising the comfort zone that is governance and accountability, I propose that post COVID-19 the role of the Board needs to be a more pro-active, contributory role. The Board has always seen itself in service of its shareholders. I propose that the Board needs to move to SERVE its society, which in turn will be in service of its shareholders. Boards can be aligned and better attuned to handle the post-pandemic recovery, regardless of geography, sector or structure by playing the following 5 roles, easily remembered by the mnemonic SERVE:
Stewarding the Corporation: Boards need to be far more active in ensuring the sustainability of the business and organisation. If COVID-19 shows us one thing, it is that almost no organisation or nation was prepared. Executives, while intensely focused on short to medium term growth and performance, have not been well challenged to focus on the ‘unknown unknowns’ that confront their organisation. Sustainability has tended to be a corporate euphemism for environment and not an all-encompassing central goal for the organisation. Yet a small but respected cohort of global medical and economic leaders had been talking of the risk of a global pandemic for quite some time. Why did most organisations not listen and listen loudly? I suggest that Boards did not want to listen. These calls were historically left in the ‘too hard basket’.
Stewarding the corporation requires the Board to have ultimate accountability not just for performance but also, and even more so, for survivability and sustainability.
Exploring the Future: There seems to have been an increasing trend in organisations, led or condoned by the Board, to focus on the short to medium term performance and results on a narrow range of key performance indicators. True strategic thought and, dare I say, imagination appears to have become limited and constrained by market forces or leadership risk aversion. Post COVID-19 the successful organisation will not just recover, it will reinvent in the truest sense of the word. Given the dramatic social fracturing arising from COVID-19, the Board needs to enable and engage in a long-term, exploratory focus to encourage a more pioneering and entrepreneurial element to the company’s strategy. It is far harder now to predict customer behaviour, employee behaviour, competitor behaviour and stakeholder and shareholder behaviour.
An exploration mindset will be essential to Board stewardship. Boards need to be unafraid to imagine, play and create.
Reinforcing Organisational Leadership: Increasingly in recent decades we have seen Boards, both from a risk and a time perspective, establish stricter boundaries between themselves and their management team. This has, anecdotally, increased conflict between these two leadership cohorts who evidentially need to work hand in glove. Central to the gap is the limited contribution Boards make to the development of their management. Boards have tended to ignore or abdicate actual Executive development, with their role tending to be a monitoring and governance role in terms of Executive talent management delegated to the Board’s Nominations Committee, or similar. Post COVID-19 Boards need to develop a more focused, frequent and formal way of coaching and developing their Executives. Boards cannot sit disconnected in judgement if they are not first and foremost connected in development.
If Directors are truly appointed for their own skills, experiences and competencies then it seems wasteful not to formally develop a way to transfer these to the Executive team.
Validating Reputation: No more prescient a time exists in memorable history than now to show how organisational and leadership reputation can be built or destroyed in a single event. The Board has typically, historically focused on risk management, with the intention that this will protect reputation. Boards need to validate reputation, not protect it. Now is the time for Boards to be more closely and directly influential on their organisation’s reputation. Directors are ambassadors in society for the future their organisation chooses to pursue. Directors are proactive protagonists for the key issues their organisation chooses to contribute to society in an effort to heal the fracture. Directors are not simply there to monitor and manage the Executive or review the risks.
If the behaviours and decisions of the Board can damage reputation then so too, should the Board actively choose to behave and decide in a way that validates reputation.
Exemplifying Behaviour: Underpinning everything the Board does needs to be an unequivocal and visible commitment by every Director to lead and behave in complete accordance with their organisation’s ethos. Directors can no longer sit outside or above society’s expectations of an organisation. In a fractured society, confidence is built by role modelling and Directors can and need to be exemplary role models for their employees, their customers, their shareholders and stakeholders. This too requires that every Director continues to be a learner. Directorship is no longer the completion stage of an individual’s development.
Directorship should require the individual to commit intensively to further individual development to ensure that Directors can SERVE their society.
If Directors and Boards apply these five roles in an integrated way, they will better work to SERVE their shareholders in a modern and meaningful manner. COVID-19 is not only about the pragmatics and tactics of how people operate in a workplace in a socially distanced way. COVID-19 is not only about how organisations recover their economic position after facing a revenue cliff. COVID-19 is an opportunity, from the Board down to challenge the fundamentals of how we lead and organise in order to respond to both the new needs and psychological scars of our society. If Boards don’t seek to truly SERVE their shareholders, then their organisations might recover but are unlikely to reinvent and ultimately others will supersede them.