Writers at Women In The Boardroom had the opportunity to sit down with (virtually that is) board service and board leadership experts to talk about the Coronavirus pandemic. We wanted to learn more about the key ideas and strategies we should be thinking about as prospective and sitting board members and how the current crisis will impact how boards operate moving forward.
This week’s expert is Howard Brod Brownstein, CTP, a nationally-known turnaround and restructuring professional, and someone who regularly provides programs for us at Women in the Boardroom. He is President of Brownstein Corporation, which provides turnaround management and advisory services, as well as investment banking, fiduciary services, litigation consulting, investigations and valuation services. He also regularly serves on the boards of directors of public and private companies, and currently serves on the boards of: P&F Industries (Nasdaq: PFIN) where he chairs the Nominating/Governance and Strategic Planning & Risk Assessment Committees, Renew Financial, where he serves as chair of the Risk Committee, and Merakey, a nonprofit with over 10,000 employees. He is a Certified Turnaround Professional, and also an NACD Board Leadership Fellow and Immediate Past President and Board Chair of the NACD Philadelphia Chapter. He has authored ninety articles and textbook chapters, is a Contributing Editor at two publications, and is a regular guest-lecturer at Harvard Business School, Wharton, NYU and elsewhere. He received JD and MBA degrees at Harvard, and B.S. (Wharton) and B.A. degrees from the University of Pennsylvania.
What do you think are the most desired leadership skills, attitudes, and behaviors that board members should be exhibiting during the covid-19 crisis
The current crisis is an unfortunately good example of how boards must be prepared for the unexpected. This requires an openness of mind and curiosity that are often at odds with human nature, which tends to create narrowmindedness and defensiveness when our ideas and beliefs are challenged. Board leadership requires setting an example of openness of mind and curiosity: What might we not be considering? What signs might we be missing? Whom have we not heard from? Which board members aren’t being heard from? What don’t we know that we don’t know?
What governance and oversight areas should boards be most focused on in the short term in wake of the covid-19 crisis.
The current healthcare crisis may affect every company differently and therefore it requires an openminded inquiry into what the effects on a specific company might be – both short and long-term. While there may be effects on entire industries, like restaurants and retail, companies within an industry may be affected differently. And while some effects upon a company are direct, others may be indirect, e.g., upon a company’s suppliers, customers, communities, etc.
One of the first principles of crisis management is triage: prioritizing and addressing issues and problems based upon their imminence and severity, both immediately and subsequently. So conventional metrics such as EBITDA, market share and share price may temporarily have to be put aside, in favor of cash.
When and how do you think boards should be interacting with crisis management teams?
Few management teams have any experience managing through an existential crisis, and the tasks of crisis management may be voluminous, even while the substantial requirements of day-to-day management continue. Boards should always at least consider bringing in an advisor anytime it is confronted with something that may be new for the board and/or management. Acting early is important, since just like in medicine, early intervention can lead to the best outcomes. Be ready for resistance from board members or management: “Oh, we can handle it ourselves.” Perhaps they can, but further inquiry is necessary before concluding that outside assistance isn’t required.
Outside crisis management advisors can also be helpful if it is important to gain the support of stakeholders such as lenders and suppliers, especially where there may have been lagging payments, defaults, etc.
How should Boards be preparing now from a fiduciary, risk and impact perspective for a post covid-19.
Once a crisis management plan is in place and appears to be being executed well, and any existential threat to the company has been reduced or eliminated, attention can turn to “What’s next?” Things may not return to “normal” anytime soon, if ever, as behaviors and practices may have been changed permanently. Perhaps people will have gotten more used to the convenience of online shopping through necessity, and will be less likely to return to shopping malls and stores. Possibly cooking at home will have enjoyed a resurgence, and eating out will become less prevalent. It may be too early to predict accurately how things will play out for each industry and company, and so boards should be looking at multiple scenarios, and remain openminded for new information as it arrives.
How should boards reflect on the performance of their board members during the covid-19 crisis and what implications might that have for boards in the future?
Warren Buffet famously said, “Only when the tide goes out do you discover who’s been swimming naked.” So the current crisis may reveal a great deal about the level of engagement and usefulness of board members that may have been concealed when things were “normal”. So it is appropriate for boards to perform an evaluation process once the crisis is receding, and in fact anytime a company goes through something unusual or unexpected. In addition, boards should consider right now – during the crisis – if the requisite skills needed may not be adequately represented on the board, in which case changes or additions may be appropriate.
Photo by Markus Spiske
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