Conversations on Governing During a Pandemic: Thoughts from Two Fortune 500 Company Directors

If we each had a quarter for every time we’ve heard or read
the word “unprecedented” since the declaration of the Coronavirus Disease 2019
(COVID-19) pandemic, we would have plenty of money despite the nosediving stock
market. In these—dare I say—unprecedented times, boards and the companies they
serve are faced with new governance challenges and opportunities.

To get some real-time governance perspective, I spoke to two
highly accomplished directors about their insights on this front: Jan Babiak
serves on the boards of the Walgreens Boots Alliance and the Bank of Montreal and
works with large private companies across different industry sectors, and Greg
Sandfort is a director and the former president and CEO for Tractor Supply Co.
and a director for the WD-40 Co. Some important themes emerged from the
discussion.

Help management fight
the alligators rather than fighting them yourself. Babiak has a colorful
analogy for the role of the board during this crisis: “Imagine that management
is in the swamp fighting alligators,” she said. “The board should be on the
bank, pointing out the alligators management can’t see, while at the same time
keeping one eye on the horizon for a meteor on its way.”

Board members should not become needy during this time, she
advised. “Don’t ask unnecessary questions. Do your homework—read the website,
look at the company’s internal and external communications like their LinkedIn
posts, and review what analysts are saying—before asking management obvious
questions about what they are doing,” she said.

Pull together,
virtually, while management goes “red team, blue team.” Sandfort’s board meetings
have gone virtual, just as thousands of his companies’ employees are now working
from home. “On one of my boards, we were using Webex for a two-day virtual
meeting with people from all over the world. The connection went completely
dark in the middle of the meeting, but we just regrouped and carried on,” he
said.

Sandfort believes the key to making virtual meetings a
success is for board members to come fully prepared, having read the materials
and being ready with smart questions that are relevant to the crisis. He is
having weekly calls for his boards, and one company will have both a virtual
board meeting and a virtual shareholder meeting this May.

Babiak stresses the need for board member flexibility, such as adding calls to her calendar on short notice (including the call with me). She has also seen management teams that cannot go fully virtual split into “red teams” and “blue teams,” working on different floors and never crossing paths in person. “If a leader gets sick on one team, then we have a second team that is already up and running,” she said.

Now is the time to live company values. “People are our number one priority,” said Sandfort of the companies he serves. “And our people will remember how they were treated when this is over.” His companies continue to pay staff in the United States and abroad, including in China, even in cases where workers are unable to be present onsite because of pandemic-related restrictions. They have also looked at issues such as health insurance coverage for virus testing.

Babiak likewise sees “a lot of heart” in what is happening during
the COVID-19 pandemic and is doubling down on sensitivity. “I noticed a CEO was
struggling on a subject during a recent board call,” she said. “Instead of
saying something at the time, I reached out to a fellow board member with
expertise in the area and suggested that he call the CEO with an offer of
support. Now is not the time to undermine management.”

Cash (or access to it) is king. Both Babiak and Sandfort mentioned that access to operating cash was an early concern during the pandemic. One of Sandfort’s companies pulled in a revolving line of credit despite a strong balance sheet. According to Babiak, who serves in the banking sector, banks are—in a sense—fortunate to have lived through the 2008 financial crisis because they have been through stress tests and now operate under significant capital requirements. They have also moved beyond single debt models, which is a stabilizing factor.

Challenges may overshadow opportunities right now, but keep your eyes
peeled. “Opportunities” seems like an odd word to be associated with the
current state of the world, but they do exist. Internal opportunities such as
improved information technology connectedness and communications are bright
spots, according to Sandfort.

Also, the need to be
flexible during this time can benefit employees and customers alike, leading to
innovation and perhaps enhanced online revenue. “I serve on the board of a
company that is a needs-based business for customers, and our suppliers will
run trucks if our stores are open,” he explained. “So, the company shortened
store hours, using the evening hours for deep cleaning. And the company is
offering curbside pickup for online orders.”

Babiak also believes the
board should be proactive in thinking about possible mergers and acquisitions and
about senior talent acquisition opportunities to help ensure companies are
ready when the time is right to act. “The board should be monitoring weak competitors
as we keep an eye on the horizon,” she said.

Experience counts.
Babiak firmly believes in the value of experience and of being on multiple
boards. For example, during this time she can, with permission, share best
practices from one company to another. As an experienced audit committee chair,
she sees audit practices across multiple companies, while each company’s chief
financial officer may only see them once in practice.

With her background, Babiak is confident in being flexible.
“One head of internal audit called me to ask if we could redeploy internal
audit staff to help the finance and operation staff during the crisis,” she
said. “After determining how to ensure we do not create an issue around self-audit
on the other side of the crisis, it’s all hands on deck right now, and I was
fine with that.”

Foresight can be
20/20. Two years ago, one of the companies Sandfort serves developed a
crisis plan that assumed the entire corporate office was wiped out. The
disaster plan was tested at the time and has now been put into effect with
modifications for the specifics of the COVID-19 pandemic. “The company was very
fortunate to have that plan in place,” said Sandfort. Other companies may not
be so lucky, but foresight for the next crisis begins now.

In these troubled times, it is clear that compassion and
common sense are hot commodities in the boardroom, standing shoulder to
shoulder with strategy, risk oversight, compensation, and the like. Let us hope
that exemplary crisis-time governance will be seen at levels just as
unprecedented as the spread of the microscopic adversary we all face.

Kimberly Simpson is director of strategic content for NACD, leading NACD’s credentialing programs (NACD Directorship Certification and NACD Fellowship®), coleading the organization’s Fortune 500 advisory councils, and routinely contributing to NACD member education through blogs and articles. Simpson, a former general counsel, was a US Marshall Memorial Fellow to Europe in 2005.

COVID-19. Uncertainty. Fear. Recession. Fiduciary Duties.It’s essential that directors know what to focus on and when.

Become an NACD member today.

NACD: Tools and resources to help guide you in unpredictable times.

COVID-19’s Impact on the Workplace: A Test of the Board’s Resiliency

The unprecedented nature of the Coronavirus Disease 2019 (COVID-19) pandemic has set in motion one of the most abrupt disruptions in decades, leaving organizations reeling. For that reason, it could present the ultimate test of resiliency for everyone leading companies in every industry—including the board. How well companies pivot in this environment and in the aftermath could have a lasting effect on their reputations and brands. More importantly, as organizations focus on transitioning their people to a remote workplace, opportunities may come about to learn new ways of doing business for the long-term. This is a time when the board can prove its mettle as a strategic advisor to the CEO.

As the pandemic brings many businesses to a halt, the effects of quarantine, isolation, and travel restriction strategies are having a brutal impact on the economy and multiple industries, with the financial markets punishing investors with steep declines. Up to this point, new and total infections, fatality rates, reductions in economic activity, and massive fiscal and monetary measures by the public sector have overshadowed the impact on people in the workplace and what companies must do to sustain operations as best they can under the most extenuating of circumstances. But that is fast changing.

Now that countries, provinces, states, and
cities are instituting lockdowns, shelter-in-place directives, or similar
requirements to limit the spread of this highly contagious virus, companies are
focused on transitioning their organizations and workforces to environments
where their managers and employees will be working remotely for an indeterminable
period of time. Given these optics, what role should the board play as their
organizations transition to a distributed workplace?

There are a number of items boards should consider acting on as CEOs and organizations grapple with the people-related challenges of the COVID-19 crisis. Ten suggestions for boards are offered below, some of which relate to the basics found in any crisis management playbook. Rather than addressing the decisions associated with navigating an economic slowdown (e.g., downsizing headcount; compensation adjustments; asset divestitures; selling, general, and administrative expense cuts; and other options) the focus is on managing the effects of transitioning to a distributed workplace, including the impact on organizational culture.

1. Know the board’s place at the table. The board’s role should be delineated from management’s role. Management is responsible for developing and implementing the overall strategy to protect the health of the workforce while putting it in a position to continue to work productively. The board is responsible for advising the management team as it executes the company’s response and monitors progress. Directors need to resist getting too hands-on. The CEO’s job is tough enough at the moment.

2. Understand management’s internal communications plan. Communications are vital during any crisis. While disclosing the impact of the crisis is important, the most important communications are to the organization’s employees. What is the plan, its objectives, and its tone? Is there an appropriate cadence of communications from various leaders so that employees know when to expect messages, as opposed to feeling left in the dark? Do internal communications convey empathy to employees? Are they forward-looking to give everyone an idea as to what’s happening around the company? In lieu of droning on in negativity, offering something grounding and trustworthy can be valuable in these difficult times.

3. Ask management how the company’s transition to a remote work environment is going. Highly mobile organizations can make the transition to a remote, work-from-home workplace relatively seamless—that is, among employees who can work remotely. But this transition can present formidable challenges to organizations that are anchored to their offices and physical facilities. During check-ins with management on crisis response, ask what the company is doing to support the technology, tools, and cultural challenges created by the sudden shift to virtual work, if applicable.

4. Encourage a watchful eye for new leaders who emerge from the fire. These are extraordinary times. Everyone in the organization from top to bottom will be battle-tested. Boards should encourage management to watch for those who flourish in this environment and to support them as they provide leadership. History teaches us about many generations of leaders who have been steeled by extraordinary events. This fluid environment creates a unique opportunity for team members to shine and show what they are made of.

5. When the sun rises, request management to conduct a post-crisis assessment in the cool of day. For companies unprepared for this crisis, a process should be put in place to capture the lessons learned in real time.Before memories fade, company plans and procedures for navigating abrupt business disruptions—including a global pandemic—should be updated using these lessons. And, as stated above, the employees who took the initiative to lead should be noted.

6. Ensure that the organization focuses on its customers. The crisis may present opportunities to deepen relationships with customers. Now is the time for out-of-the-box thinking on how to help customers, particularly for those companies that may be struggling to survive. This will help to differentiate the companies that are flexible and agile from those who are not.

7. Point out the opportunity to improve remote work policies and procedures. Whether deployed selectively or mandated outright, decisions to work remotely—beyond present remote arrangements—offer an opportunity to learn how to ensure that such arrangements work effectively and efficiently into the future. These lessons may be invaluable for companies as the trend toward telework continues to evolve, worker flexibility programs expand, and the volume is turned up on improving quality of life.

8. Suggest that management make it a priority to regroup on a regular basis. Keeping everyone on the same page in a remote environment requires special attention. The unique stresses, pressures, and concerns the COVID-19 crisis presents to employees create a difficult environment for preserving morale. Whether as a small group, the whole team, or even through one-on-one interactions, remote workers should meet at least weekly to stay in touch and ensure that everyone is on the same page about specific expectations, project deliverables, and timelines using the tools the organization has available. It is especially helpful when those tools allow for face-to-face meetings as nonverbal cues and body language are an important part of human interactions.

As the “touch” in the workplace is removed, the “trust” between colleagues and senior leadership becomes even more important. Through appropriate electronic tools, leaders should spread awareness of successes in order to build motivation and develop social involvement among employees. In uncertain times, employees can be motivated by seeing positive actions recognized and a strong focus on the future from their leaders.

9. Ask the question: When the crisis passes, what will we have learned about how we do business? Two years from now when the CEO and executive team look back on this crisis, what will they observe? Will they recognize that what they learned from temporary transitions, as discussed above, served as a catalyst for accelerated shifts in workplace design? Will what they learned inform ways of altering company strategy, including the way the company does business and goes to market? Will the lessons from the crisis alter management’s views regarding the organization’s real estate needs? These important questions point to the power of technology to transform how and where people work.

10. Ask another question: Will our people be more or less loyal based on how we managed the crisis? The crisis presents an opportunity for leaders to let their people know that the company truly cares about them and their well-being. Their actions in both word and deed carry the possibility of strengthening culture. Does the company’s response to the crisis meet this test?

The COVID-19 crisis is a new test of resiliency for directors, managers, and employees alike and everyone must learn how to meet it together, with a focus on continuous improvement, shared values, and mutual trust. It also presents a test of leadership. Prioritizing and reprioritizing tasks and activities is going to be a necessary art for most organizations over the next several weeks. Keeping teams focused on the greatest issues and risks, avoiding needless distractions, positioning themselves to ramp back up to normal operations, and building a culture of trust and empathy is the name of the game.

For an expanded discussion, see Protiviti’s companion piece.

COVID-19. Uncertainty. Fear. Recession. Fiduciary Duties.It’s essential that directors know what to focus on and when.

Become an NACD member today.

NACD: Tools and resources to help guide you in unpredictable times.

COVID-19 Pulse Survey Reveals Boards Have Confidence in Management

NACD this week polled nearly 200 members to better understand how directors and their boards are responding to the coronavirus disease 2019 (COVID-19) pandemic. While the economic, social, and political impacts remain in flux—evidenced in one dimension by the S&P 500 declines and gains of nearly 10 percent last week—corporate boards are in a unique position to help management respond effectively to the short- and long-term implications of the crisis.

Director responses to the pulse survey reflect the early actions boards are taking to combat the crisis, and their responses may have shifted in the time since. NACD’s Resource Center: Responding to the COVID-19 Crisis can help directors govern more effectively through these uncertain times. And NACD’s March 2020 poll reveals how boards have been doing so in real-time over the last week. Several findings stand out:

Boards are proactively engaging with management to address the COVID-19 response.

Nearly 3 of 4 directors (76%) report that their boards have discussed COVID-19 with management. In such times, board collaboration with management is likely to be less hierarchical, more frequent, and can blur traditional lines of demarcation between board and management activities. Many respondents report that they have already taken a serious look at what management has done to prepare their staff and position the organization for a very different operating reality. About half (49%) report that they have reviewed internal corporate communications strategies and slightly fewer (42%) have worked to establish expectations for board/management communications. Further, only 45 percent of boards are pressure testing management assumptions about the business impact of the virus.

Source: NACD March 2020 COVID-19 Pulse SurveyOrganizations are putting their people first.

The majority of directors responding report that their organizations are currently focused on the health and well-being of their employee population. Many companies have started to rigorously assess the impact of employee and business exposure to the virus (74%). Most have reviewed the Centers for Disease Control and Prevention guidance for employers (64%) and developed internal communications strategies (66%) to keep employees up to date on evolving plans. Further, in their next board meetings, two thirds (67%) of directors indicate that they intend to evaluate the effectiveness of management plans to protect the health and welfare of the employee population.

Source: NACD March 2020 COVID-19 Pulse SurveyDirectors are comfortable with the effectiveness of management’s crisis response at this moment.

Directors generally give their organizations high marks for their initial crisis response and collaboration with the board. Seventy-four percent report that their board gets sufficient information from management and 71 percent find management’s response so far to be effective. In general, directors report confidence in the ability of management to handle the near-term effects of the crisis and are satisfied with what they see.

Many anticipate a short-term business impact.

As of March 16, about a third of S&P 500 companies had disclosed COVID-19 in their risk factors (30%) and earnings calls (33%), according to MyLogIQ, a public company disclosure information aggregator. Numbers are similar for the Russell 3000, where risk-factor mentions jumped from 29 percent to 39 percent between March 12 and 16, per MyLogIQ. In the NACD poll, most directors saw the largest likely disruption in the demand for their products (28%) followed by employee productivity (19%), and impacts to their supply chain (16%) and the capital markets (14%).

Source: MyLogIQ (based on keyword search “coronavirus” and “COVID-19” in public filings from 03/12/2019 to 03/16/2020)At the moment, few have turned toward the longer-term implications of the crisis.

While much of what is described above displays director’s confidence in the near term, few have looked toward the longer-term implications of the crisis. Somewhat surprisingly, just 14 percent report reviewing risk-transfer options management might have at their disposal, such as insurance coverage on property, supply chains, or business continuity. Just 13 percent report making a decision to postpone a major 2020 investment. Further, only 16 percent report discussing post-crisis plans with management. 

At this early stage in the crisis, NACD’s director
members report having initiated conversations with management that revolve
around the following types of questions:

What
are the trigger points for incremental policy actions (to protect employees)
and financial actions (to respond to declining product or service demand,
material, or labor availability)?If
we had to close the books for the first quarter remotely and issue results,
could we do it, and could our auditors perform the necessary procedures
remotely?What
are alternative sources of supply for the materials/goods we use? How quickly
can an alternative supply source be deployed and at what change in costs? What
does this mean for our budget?How
do we address or mitigate key risks locally, and, if appropriate, abroad?This quick poll shows that boards have confidence in
management to support their employee populations and deal with the early stages
of the crisis.

NACD will continue to gauge the pulse of its membership as the crisis evolves and becomes more complex to understand the changing governance challenges faced by members and help to identify potential solutions. This includes virtual board and annual meeting management and planning both for potential recession and recovery.

NACD’s March 2020 COVID-19 Pulse Survey results were featured in a Wall Street Journal article on March 18, 2020.

COVID-19. Uncertainty. Fear. Recession. Fiduciary Duties.It’s essential that directors know what to focus on and when.

Become an NACD member today.

NACD: Tools and resources to help guide you in unpredictable times.

6 Best Practices for Virtual Meetings

As we rapidly transition our teams to a virtual way of conducting business, adopting new technology is not a luxury, but a necessity. It’s important to know how to put our best foot forward when navigating the world of virtual meetings.
We’ve put together 6 best practices that will help you adapt to this new form of communication. These tips will help serve you in preparation for client, team, and other meetings you may attend now and in the future.
 Be aware of your background.
If you’re not used to working in a remote environment, you may not realize that what’s behind you really matters. There may be things in your background that are distracting. This is especially important when you’re in a main room of your house with partners, kids, and pets walking around behind you.
We suggest you try to minimize distraction by setting up in a room that’s out of the way, has a door to reduce noise, and does not have a lot of traffic.
You can also make use of a virtual background if your meeting application has that capability. Create an image that is branded with your company logo and display it behind you. This will take away any distractions in the background and allow your meeting to stay professional and on topic.
 Camera height and positioning.
It may be tempting to set up your laptop or webcam on any surface when preparing for your next meeting. If you’re not careful, this could impact the impression you have on a client or meeting attendee. It’s important to check the camera angle whenever you change locations for a virtual meeting.
If your camera is set too high, above eye level, it will give the illusion that people are looking down at you. If your camera is set too low, along with being a very unflattering angle, it could make an attendee feel that you are talking down to them. This has the potential to unintentionally change the mood and feel of a meeting.
To combat this, always make sure to set the camera at eye level. This will ensure you are sitting on an even plane with whoever you’re meeting with and will put them at ease through the conversation.
Minimize background noise.
Now, this is a tricky one, especially if you currently have a household full of kids or others who will no doubt make some noise at an inopportune time. If you can, make sure to situate yourself in a quiet place within your home, preferably a room that has a door to buffer any outside noise. You can also use headphones that have a built-in microphone. Typically, these microphones will pick up your voice only and reduce anything a laptop speaker may pick up easily.
Another way to ensure that you’re not disrupting the call with any outside noise is to mute your microphone. This can be done directly through the meeting platform or your headphones may have a mute button. This will help keep the call on-topic and not distract speakers.
You also should be mindful that currently, people may have background noise they normally wouldn’t have. It’s important to have grace for those you’re meeting with and realize that some things may not be in their control in this climate.
Lighting.
Adjusting the lighting for a virtual meeting can be difficult. It can be frustrating when you’re trying to put your best foot forward and just cannot get the lighting to cooperate. The best practice is to set up so that you have a room with bright windows and a wall behind you.
You may not have access to perfect lighting, so there are a couple of tricks to getting it just right.  If there is a window behind you, make sure you also have light behind the webcam and in front of you. This will help balance the “halo effect” that can happen with a bright light behind you. You also don’t want too bright of light in front of you. This could wash out your skin and your facial features.
Always have a backup.
When using any type of technology, it’s good to have a backup option. Due to an overwhelming number of companies transitioning to online platforms, there may be a breakdown in quality. It’s recommended that you have a second meeting app to switch to if your primary one is not functioning properly.
Keep this in mind for hardware as well. By this, we mean your headphones or the actual device you’re using to connect to the call. Most platforms have an app that can be used on your smartphone or tablet. Make sure to download the app and login, so that you’re able to start or continue a call if your laptop or desktop computer is not functioning correctly.
Don’t forget that people can see you!
Always assume that you’re on camera and that you are unmuted. Everyone’s heard of the one person on a large call that forgets they’re in front of the camera and decides to pick their nose, make a face, doze off… you name it. This applies even if you believe your camera and microphone are off.
To keep from making any mistakes, try your best to be engaged, take notes, and ask questions. This will let the presenter know that you care about their topic, but it will also keep you engaged and out of trouble.
The post 6 Best Practices for Virtual Meetings appeared first on CPIWorld.

Supporting Individuals Impacted by COVID-19

Within CPI’s Global footprint, we’ve seen firsthand the varied and unique impact of COVID-19.  If you find yourself unemployed due to COVID-19 and have no professional transition assistance, we can help.  Through our page Immediate Individual Help page, we are sharing important information and immediate actions you can take to prepare you to move on to your next role.  Know that you are not alone and that many others are currently in a similar situation.  This is a temporary setback.  Our Members around the world are here to help individuals and organizations move forward into the future of work.
 
For organizations seeking broader support across the employee lifecycle, visit our home page CPIworld.com for more information.
The post Supporting Individuals Impacted by COVID-19 appeared first on CPIWorld.

The Leading Advantage – Leadership Coaching to Propel Success

Launching today is The Leading Advantage, a Career Partners International podcast.  Throughout the series, we will be exploring case studies, hot topics, and best practices in leadership development and executive coaching.
Bill Harmon, of Promark, A CPI Firm, joins us on the inaugural episode of The Leading Advantage to discuss a succession planning based coaching engagement for a 3rd generation family business.  This unique case study highlights the benefits of a long-term engagement and how a trusted coach can help a strong individual contributor transition into and cement themselves as a leader within the organization.
Available on Spotify
The post The Leading Advantage – Leadership Coaching to Propel Success appeared first on CPIWorld.

Our Shared Focus

CPI Focused On Wellbeing And Care For Your People
Populations around the world are experiencing and responding to the impact of COVID-19 in many different ways. At Career Partners International we are ensuring our people and systems are protected and performing, so your people can be served as you expect. We are uniquely positioned to provide local response and service through a globally consistent framework. Our Headquarters Operations, Members, and Technical Solutions partners all benefit from being geographically distributed and remote. This structure enables us to shift resource needs and services seamlessly around the world. Each Member and Service partner is implementing procedures for: visitors, travel, and work from home access; facilities hygiene practices; operational backup and redundancy plans; and communication and coverage systems all at a scope and scale in line with the degree of impact in their area.
Beyond our ability to provide continuity of care to your people participating in our programs, you may have questions related to the stability of our technical infrastructure at the center of continued delivery performance in the face of a Pandemic. Our Business Continuity Plan is kept current and related staff training is up to date. Business Continuity at CPI includes preparations to help assure the viability and reliability of CPI internal infrastructure in the face of a major crisis, including Pandemics and Epidemics.
We recognize issues created by COVID-19 add stress and complication to the already complex world in which we all work. CPI is here and uniquely able to help, and wish you and your people throughout the world continued success and good health.
-Bill Kellner, President & CEO of Career Partners International
The post Our Shared Focus appeared first on CPIWorld.

Seven Things to Consider Before Taking the Leap

In last month’s career goals survey by Greene and Associates Inc., a CPI Firm, 47% of respondents indicated they were preparing for the next level of leadership. Deciding to take that leap requires one to weigh career decisions with a strategic mindset and a 360-degree view. Doing so will help develop a career roadmap and provide clarity to decide if that next opportunity is the right one.
Imagine this:
One of your colleagues recently told you that a new role within your organization is being developed. He also said that your name is at the top of the list to be considered. You decided that you want additional challenges, yet when this opportunity came your way, it was a surprise. You are flattered that people see you as a leader, but is this opportunity really what you had envisioned when you decided to take your career to the next level?
Here are seven questions to help you decide if that opportunity is the right one.
·    Vision: Where do you see yourself in the next five years, and will this role propel you there?
·    Confidence: How confident are you about excelling in this new role?
·    Values: How closely aligned are your values with the new role?
·    Work/Life Balance: How will you manage family, community involvement and other aspects of life with this new level of responsibility?
·    Capabilities: What can you contribute to the role, and what do you need to learn?
·    Relationships: Who will support you internally as well as externally?
·    Presence: What is the leadership presence that you convey now? Will that need to change in this new role?
At Career Partners International, we know that leadership is a journey and that it takes courage, humility, and discipline to embrace the next step.  With over thirty years of experience supporting individuals and organizations throughout the employee lifecycle, CPI can help you and your team catapult to the next level.
-Barbara A. F. Greene, CEO of Greene and Associates Inc., a CPI Firm
The post Seven Things to Consider Before Taking the Leap appeared first on CPIWorld.