Boards need to take steps to ensure that their organisations are equipped to address the risks, challenges and opportunities that have arisen from the COVID-19 pandemic. They should re-consider their board composition, review their succession plans and reflect on the skills and expertise that have been missing or need strengthening.
Non-executive directors (NEDs) can play a crucial role in supporting the executive team during these turbulent times by guiding and coaching the senior management team, and identifying priorities.
Do boards have the right combination of skills, experience and expertise?
NEDs are vital in managing a crisis. Boards of all organisations, private, public and third sector, need to act quickly and take decisive action while the facts are still emerging and knowledge is limited. Because they are in a non-executive role, and not “in the business”, NEDs can bring a different perspective, add insights and highlight alternative scenarios and potential outcomes.
Boards must investigate whether they have the right combination of talents to realise the opportunities that the COVID-19 pandemic has created and to meet the challenges that have emerged in both the short and longer-term.
What skills and experience do UK boardrooms need?
In May 2020, we sent a short questionnaire to the NEDonBoard community asking NEDs and chairs about their views on the boardroom response to the COVID-19 pandemic. 35% of respondents reported that, in their opinion, the composition of the boards on which they serve had not been adequate to address the challenges, risks and opportunities that had arisen from the pandemic.
Even where board composition was assessed as adequate, respondents indicated that some skills, experience and expertise needed strengthening. According to our research, the top five skills currently most in need in UK boardrooms are:
- Contingency planning.
- Crisis management.
- Risk management.
- Stakeholder engagement.
However, as of the end of May 2020, only 25% of surveyed NEDs indicated that their board had acknowledged these gaps and were planning to update their succession plans. A worrying 50% of boards have not acknowledged these gaps at all yet.
Boards must react quickly to fill any gaps and search for NEDs who can make a difference to their organisations. These positions should be well-publicised to attract the right number and calibre of applicants. Boards can then select individuals who are the best match for their organisation in terms of their skills, values and cultural fit. Boards can also leverage the breadth and depth of the NEDonBoard community to appoint the right talents to join them.
Succession plans for existing directors should be on the agenda
Another concerning data point that the NEDonBoard study uncovered is that 55% of boards have not discussed or implemented succession plans. This is particularly worrying as COVID-19 could affect a senior executive, NED or the chair. Succession planning must be on the board agenda so that organisations are adequately prepared to deal with the challenges and opportunities created by the COVID-19 pandemic.