Today, we have a ringside seat to governance in action. Were all the events resulting from COVID-19 foreseeable? No. But we were warned. Bill Gates’ 2015 TED Talk, “The next outbreak? We’re not ready,” is foreboding. Avoidance—not wanting to face our worst fears—is one reason why the world was inadequately positioned to respond to this pandemic and its economic impact. Fear and avoidance of conflict are not solutions.
Around the world and across our countries, cities, and communities, experienced and insightful advisors are needed in this time of crisis to provide leadership and guidance. Public company leaders, including board members, are confronted by a microscopic threat that has caused thousands of deaths and paralyzed the global economy. The resulting syllogism is that since people have died from COVID-19—some with underlying conditions, but some relatively healthy—will it indiscriminately lead to many people’s deaths?
An important role of a board is to act as an advisor during crisis, helping management see down the road and around the corner. As the Global Head of Board Engagement at Nasdaq, I have the opportunity to interact with CEOs, board members, and other executive leaders. Even with the economic crisis of 2008 still visible in our rear-view mirrors, what I have seen prior to this current crisis is that too few directors were thinking about the worst-case scenario “what if.” Yet, while most were avoiding a truly worst-case scenario, I can think of two company boards where more than one director emphasized the board’s need to consider conducting “tabletop” exercises for the possibility of black swan events on an annual basis.
Financial oversight, selection of the CEO, wise counsel, and setting an enduring tone from the top are essential elements of successful corporate governance. These elements require experienced, diverse input and communication. To paraphrase Dr. Amy Acton, on the front end of a crisis, you look like an alarmist, on the back end you didn’t do enough. Another key aspect of a board is that it’s a single group comprised of individualists. In the boardroom, critical thought, constructive dissent, and credible challenge are essential. Outside of the boardroom, individuals must speak consistent with board agreement.
Leaders are made for crisis. In his 1954 Hope for the Future speech, Winston Churchill offered, “I cannot believe that the human race will not find its way through the problems that confront it, although they are separated by a measureless gulf from any they have known before… Thus, we may by patience, courage, and in orderly progression reach the shelter of a calmer and kindlier age.”1 For a visionary leader or an innovator, urgency and necessity are pathways towards inspiration and innovation. For a CEO, crisis is an opportunity to step into the gap and demonstrate courage that counts. For a board member, critical thinking may upset the status quo. I believe this, at times, is essential to drive excellence. After over ten years of measuring board performance and entering boardrooms, I have observed that constructive conflict not only builds credibility, but it is essential.
1The Estate of Winston S. Churchill (2008). Churchill By Himself: The Definitive Collection of Quotations. (Richard M. Langworth, Ed.). PublicAffairs.
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