A cool head in times of upheaval – a clear-thinking checklist for directors
Floods – and the pressing issue of climate change, anxiety around international conflict, and the ever-evolving impact of COVID-19: There’s no doubt that 2022 is dialling up the upheaval and uncertainty to new heights.
As organisations grapple with the latest series of risk events, it’s essential that boards and senior managers lead proactively – and calmly – from the top.
To help ensure stability and good decision making during these times of change and challenge we have outlined a clear-thinking checklist for directors and senior managers.
Get up to date with scenario planning and crisis management
Before the pandemic hit, Governance Institute’s Risk Management Survey found that almost 40 per cent of businesses were not regularly testing their risk and crisis plans — leaving them exposed and under-prepared for major crisis. Just 11 per cent were regularly running scenarios around risk events to test how the organisation and employees will respond.
So, if these gaps in your organisation’s crisis management and business plans haven’t yet been filled, this must now become an immediate priority.
The broader task of scenario planning is also imperative. Think through what might happen, what might not, and how your organisation is currently tracking against these various scenarios.
Check your risk register is up to date – but plan for your plans to change.
Careful, calm decision making and communication by the board
That well-known Rudyard Kipling quote, “If you can keep your head when all about you are losing theirs…” has certainly come into its own recently.
As staff look to their leaders in times of turbulence, it’s important to keep the panic at bay.
Key ways to calmly make effective decisions in the boardroom, as outlined in Governance Institute’s Effective Director Course, include:
|Have (and show) respect
|Respect for yourself, for the views of others and for the board conversation itself.
|Diffusion of responsibility usually means no responsibility
|Responsibility ultimately rests with the board as a whole. Directors should be cautious about seeking to divide responsibilities among directors.
|Silence can be a good thing
|Sometimes, it is more important to listen than to speak.
|Silence can be a bad thing
|If you believe that something needs to be said, say it (constructively).
|Remember (and use) the Ladder of Inference
|Know (and explain) where you are on the ladder and encourage others to do the same.
|Be brief, structured and clear
|Say what you mean clearly (and only once).
|Diversity of perspectives and diversity of views can improve the quality of the conversation
|Apply the Covey principle of ‘seek first to understand, then to be understood.’
|Listen, think, speak, and act rationally, rather than emotionally
|Be (and remain) aware of your emotional state.
|Shouting is not conversing, it’s just shouting
|When you display uncontrolled emotion, that is about all that you are communicating.
|As a board, your shared goal is (or should be) to reach a shared understanding, even if directors have different views
|Ultimately, it is the board’s views, not the individual director’s views, which is paramount.
Source: Effective Director Course
Reinforce a positive workplace culture
During times of uncertainty, workplace culture will either hold the organisation up – or pull it down.
A strong, respectful and ethical organisational culture is essential to maintain employee stability and it’s important boards ensure culture is reflective of the purpose and values.
The board’s role in maintaining oversight and monitoring culture is also essential.
Build effective CEO/ director relationships
While it is the role of the board to oversee the organisation’s risk management framework, the board is also responsible for appointing and managing the CEO.
But at all times, and particularly during times of crisis, there needs to be a clear distinction between the roles with the board only stepping in only when needed.
The board is there to provide oversight, insight and strong support to the organisation. But if there is a crisis that includes a breakdown of the executive team, then the board must have the capability to step in until that is resolved.
Now is a good time to look at the channels of communication and delineation of roles to ensure your organisation is benefitting from the most effective relationships.