How to improve governance in times of crisis? “Communicate often, offer inspirational stories and do not declare victory too soon” says Russell Reynolds Associates in a study conducted after having interviewed officers and directors around the world. “This crisis is an important stress test for the governance, explains Marc Sanglé-Ferrière, Managing Director at Russell Reynolds Associates, “if the board is united and the governance is accurate, companies will be prepared to stand up”.
CONSIDERING A POTENTIAL DISASTER SCENARIO
Goodwill is not always enough. Presidents must manage and temper the directors who wish to make themselves useful, because their actions may “bog down management teams with unwelcome demands”, notes the leadership advisory and search business. If the board must become more involved, by asking the right questions, they should not go beyond their rights. “An efficient board will not try to substitute for the operational divison, but they have to provide guidance while testing the assumptions regarding the future of the activities proposed by the management”, says Marc Sanglé-Ferrière. The line of sight remains the long term.
RAISON D’ÊTRE A SOLID FOUNDATION
By “challenging” the management, the board will open up a line of thought on the changes that will happen and on the company’s capacity to adapt to a new environment. Soon, the boards will have to work on business restart and team remobilization. “The raison d’être is a solid foundation for writing a new and inspiring company story, essential for the future, concluded Marc Sanglé-Ferrière.