Over the past year, boards have become increasingly more dynamic. However, it is important that the use their energy positively.
By Karen Loon, IDN Board Member and Non-Executive Director
How have boards and their directors been adjusting their approaches to board work since the COVID19 pandemic started? How have board practices changed? What digital tools are being used to facilitate ideas, debate and support decision making?
These were the questions which members of the INSEAD Directors’ Network (“IDN”) discussed as part of breakout sessions held during an exclusive session for IDN members held on 16 October 2020, after the INSEAD Directors Forum. The webinar was facilitated by Liselotte Engstam with support from Hagen Schweinitz, both IDN board members.
The session was opened by IDN President Helen Pitcher OBE, who shared with members details of the key initiatives which IDN have been working on over the past year, followed by IDN board member Thomas Seale who announced the winners of the Inaugural IDN Recognition Awards 2020.
IDN members highlighted a number of interesting trends in board dynamics over the past year.
Boards have become more dynamic
All members agreed that their boards have become increasingly more dynamic since the pandemic started. Experiences however between boards have varied – for example, in China boards are now meeting in person, whereas in Europe most boards are still meeting virtually.
- Focus of discussion is now on longer term strategies – For the first three to four months after the pandemic started, many boards were focused on securing the future of their businesses (for example immediate crisis management, stabilising their companies, cutting costs, improving cash flow management). However, in more recent months, boards have focused on their longer-term strategies and survival.
- More frequent and intense discussions – Members shared that their boards have been having more frequent discussions, are under more pressure as there have been more emergencies to work through, and are having more intense conversations. Whilst boards are meeting more frequently, the meetings have generally been shorter, although in some cases in Financial Services, due to regulatory pressures, meetings have been longer.
- Improved communication, in more depth – Communication amongst members has also changed, with boards increasingly using of digital technology, and having less formality. Many believe that their board discussions have improved, with some sharing that time has been found to explore in more detail areas such as staff welfare, diversity, team spirit, and proactive reinforcing of corporate culture. Many directors however acknowledge that virtual meetings are more tiring.
- Decision making processes have been impacted by not meeting in person – From the outside, it appears that boards are working well. With less travel time and more discipline, board meetings are starting on time, members are more prepared, and discussions are shorter and more to the point. However, some questioned whether this may be “form over substance”, and whether boards are suffering in other ways due to an absence of physical meetings, and whether some important discussions are not taking place, which would have taken place, for example over coffee. Decisions at times are taking longer, having been somewhat impacted by the inability of directors to network in person. Maintaining trust and relationships have become more difficult.
- Dynamism and innovation vs compliance – Some board members indicated that their boards have been struggling to find a balance between dynamism and innovation vs compliance. This is especially so in highly regulated industries, such as Financial Services.
Not all boards may have become more effective
As to whether boards have become more effective since COVID, there were mixed responses.
For the most capable boards there was a reflection on areas such as:
- How inadequate the recovery and resolution/ disaster recovery policies were
- The ability of people to innovate in times of crisis (Apollo 13 mentality) far exceeded expectations
- The opportunity the crisis created to make a step change in the way the business functions and for some reimagining the purpose.
For the less capable / less diverse boards, there has been lots more stress, centralising of control, dysfunctional blame culture and general myopic behaviour.
There was a view that boards need to ensure that they find a balance between progress vs being dysfunctional. As Helen Pitcher highlighted “… boards are working harder, some boards are stressed, that’s bringing about some dysfunctional behaviour in some, and some very positive behaviour in others”.
Directors need to find time for personal reflections
- Mental health and wellbeing – Members also shared that mental health and wellbeing of both management and the board in a Zoom world continues to be important, with management still under significant pressure, as are the board. Board members need to be supportive of their CEO and staff, and thoughtful on when to intervene.
- Find time to reflect – Board members also need to find reflection time to allow themselves to slow down and think away from the Zoom calls. More time may be required to be spent in out of camera sessions with other board members to seek to defuse tensions.
- Be careful not to be over boarded – In recognition that directors are generally spending more time with each board, members shared that now may not be a time to be over boarded. Directors should think seriously about whether they want to be on boards given the time investment and energy required in situations such as at present, and that one cannot opt out of boards when things are too busy.
IDN’s next webinar for members on “Sustainability and Climate in the Strategy and Board Agenda” will be held on 18 November 2020.