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How Boards Prepare for an Unpredictable Crisis

Most boards have a playbook to guide them through a crisis, but the magnitude of the disaster can force a board to improvise its plan.


The Street | August 31, 2017



The Street article, “How Boards Prepare for an Unpredictable Crisis,” quoted Russell Reynolds Associates Consultant Constantine Alexandrakis about how prepared boards are to deal with extreme disasters. The article is excerpted below. 

As Tropical Storm Harvey, formerly a Category 4 hurricane that brought a deadly amount of rain to East Texas, makes its final landfall, and as North Korea's most recent missile launch over Japan may serve as prelude to more military operations directed at the U.S. territory of Guam, corporate boards are finding it difficult to prepare for a disaster that by its nature is unpredictable, executive search firm consultants said.

Planning for a disaster, such as a hurricane, is ongoing, said Constantine Alexandrakis, member of the Board and CEO Advisory Group at executive search firm Russell Reynolds Associates, but the problem is the magnitude of the disaster, which can force boards to improvise on its crisis management plan. "Boards can never really prepare for the extreme disaster," he said.

...

"With a natural disaster, its location and asset specific," said Alexandrakis. He said the plan to respond to a natural disaster will be localized to ensure that assets are being protected and that the people working in that area are safe.

Another potential crisis such as a potential military strike, given North Korea's most recent activity and the ramped up rhetoric by President Donald Trump, might be on a board's radar, but directors are "probably spending more time on currency issues and natural disasters," Alexandrakis said.

"Few companies have contingency plans for an all-out war between the U.S. and another country," said Alexandrakis.

To read the full article​, click here.

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How Boards Prepare for an Unpredictable Crisis