The COVID-19 pandemic has completely changed the way boards function. For the time being, few of the normal “rules” apply. The boundary between board and management will blur. In-person meetings are no longer preferable to teleconference. Perhaps most importantly, we can no longer assume that the role of a director is inherently “part-time.”
Speaking with boards and executives in recent weeks, it’s clear that most of them feel unequipped for what they’re going through–let alone what might come next–and who can blame them? There’s nothing–no course, no playbook, no executive coach–that fully prepares leaders for something so massive and unpredictable. Nothing, perhaps, except having been through an acute crisis before, or learning from someone else who has.
I have been reflecting on the words of Jim Sutcliffe, whom I interviewed a few years back about his experiences as the board chair of Sun Life Financial. That interview was eventually used in a wonderful video series released by the Institute of Corporate Directors. Jim was also the Senior Independent Director of a platinum mining company called Lonmin during a series of events that has since become known as the Marikana Massacre. And no, the name is not a dramatic exaggeration: the events left 44 people dead within the span of a week – including 34 Lonmin miners–and dozens more injured.
During our conversation, Jim reflected on the Lonmin board’s actions and decisions with the benefit of hindsight some six years after the crisis. I believe that what he learned will provide some valuable guidance to directors and executives as we navigate the COVID-19 pandemic.
“The board is going to be held responsible for what goes on here. It’s no longer [a situation where] management’s responsible and the board sits over in the back room.”
When things are relatively normal, the division of labor between the board and management is pretty clear: a majority of the board’s work happens within the confines of board and committee meetings, and in the meantime, management runs the credit union. Crisis can change everything. In the end, every bit of authority that management has was delegated to them–either on purpose or by accident–by the board, and the board can take that authority back whenever and however it sees fit. A crisis like this one is, in my opinion, one of those times when the board should take back some authority.
To be clear, I’m not recommending that boards barge in and push management out of the way at the first hint of trouble. Ideally, your CEO and their team will have all of the talent, time and resources they need to run the credit union without any significant changes to the normal operational order. Nonetheless we have to remember that it’s the board, not management, who is ultimately accountable to members. A crisis is no time to quibble over territory or the divide between operations and strategy. A board in crisis may need to roll up its sleeves and confidently stand behind any and all decisions, and the ultimate results of those decisions. Every success and every failure ultimately rests on the board’s shoulders, not management’s.
“As chair you have to be responsible for everything in the end. There’s nobody else. There’s no buck passed beyond the chair.”
In times of crisis, board chair is the most exposed, difficult and lonely position in the credit union. We talked about all of that pressure burdening the board… well, it’s the chair’s job to hold the board accountable and make it work. When I speak to board chairs who have been through intense crisis or failure, the ones who orchestrated the best decisions are typically the ones who dive in headfirst. They speak with the CEO at least once per day. At the peak of a crisis, they speak with chairs of key committees at least once per day. They speak with individual directors several times a week and organize board meetings as frequently as necessary–sometimes several per week.
“As chair you have to be responsible for everything in the end. There’s nobody else. There’s no buck passed beyond the chair.”
Jim Sutcliffe further expanded on the role of the chair in crisis: “There is a terrible moment when you listen to this thing that’s happened to your organization and you sort of metaphorically look over your shoulder and hope somebody else is dealing with it, and there’s nobody there. It’s you.” It is a tremendous duty to bear. To be sure, the board, management, employees, and broader community are there for support, but the ultimate accountability of the chair position cannot be delegated and must be approached with all due seriousness.
“You have to deal with the human life issues. People are killed. People are seriously wounded. They’ve got families.”
The needs and lives of members are baked into the experiences, operations and decisions of every credit union board. They are the reason we serve, and it’s to them that we owe our primary duty. COVID-19 has already impacted the lives of your members, and the worst is yet to come. Boards must work diligently to understand what members need–financially and otherwise–to get through this crisis and thrive once it’s over. Your credit union will need to make complex decisions and sacrifices. Above even the immediate financial health of your credit union, you must serve your members. During this crisis, the stakes for our members are far different than normal, with the health and safety of their families, friends and communities at risk every day.
Four Recommendations for Boards in Crisis
1. Optimize your board’s effectiveness at working remotely.
Frequently assess how well your virtual meetings are going and take steps to actively improve them as needed. You may need to test multiple platforms and select the one that works best for you. Consider adjusting your calendar, ground rules and agendas to address the shortcomings of remote meetings. Some ideas include:
- Schedule board and committee meetings that are shorter and more frequent with only one or two explicit objectives per meeting
- Delegate decisions/recommendations confidently to committees and limit redundancy between board and committee work
- Only (or primarily) accept questions that are submitted in advance
- Defer to the authority of your board and committee chairs to run meetings and determine the flow of conversation (e.g. only speak with the chair’s permission)
- Expect frequent and detailed communication from management between meetings and be prepared to show up having read and understood all materials
- Schedule time for executive sessions after *every* board and committee meeting to assess what’s working and what’s not. Actively improve what’s not working well
- Board members must be prepared to commit more time than they signed up for. You cannot delegate your authority to anyone else, and “I’m not available” is not a good enough excuse in a crisis.
2. Make sure that your CEO has the support they need.
Perhaps more than ever, your CEO will need fast decisions, targeted coaching and sage advice. Be a resource so your CEO can count on you to be there when they need you.
3. Learn from your peers.
The best place to learn about processes, structures and tools that add value is by engaging with the boards of other organizations. Don’t be afraid to seek advice from outside the credit union system. Every board is going through the same crisis.
4. Be a source of calm.
These are dreadful circumstances, but they will not be helped by rushing through critical decisions. Help your board and management to carefully assess the challenges at hand and to prioritize what decisions need to be made in what order. Commit as much time as it takes to be well-informed, open-minded and careful.
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