The COVID-19 crisis has increased the demand for board insight, oversight, and advice, while boards attempt to adapt to new ways of working, new tools, and new structures. Many have stepped up as a powerful sounding board for stressed CEOs. Other boards struggle, not contributing as needed or causing unnecessary distractions.
Despite the fact that most boards have done well, over the last quarter we have seen:
Directors whose skills and experiences no longer match the circumstances of the company as strategies are rethought and companies pivot to new products, services, and operating models
Overboarded directors who could not be counted on to show up for multiple crisis meetings
Sitting CEO and CFO directors who must necessarily pay attention to their own business first
Directors with too much time on their hands who overstepped into operations, wasting management’s limited time and resources
Technology-averse directors who could not manage to join a Zoom meeting
Older directors who are no longer sure they want to go through a crisis like this again
Boards who simply do not have enough directors to staff ad hoc crisis-related committees
Boards and management teams are starting to consider how to reshape the board to cope with the current crisis, a potential second wave, and whatever the new normal looks in the years ahead. Will the board need to add restructuring/turnaround experience, more current or retired CEOs with general management experience, digital expertise or diversify itself to avoid dependence on directors in the most at-risk demographic groups (i.e., over 70)? Is there a director succession plan in place, particularly for key board leaders? Institutional investors who are looking at the board’s performance during the crisis and in the coming years will continue to push boards to improve composition and effectiveness, with an increasing focus on racial and ethnic diversity.