Board Member Responsibilities During COVID-19
April 8, 2020
It feels like we’ve been in this state of uncertainty for a long time, but it’s really just the beginning. This COVID-19 pandemic isn’t easy for anyone, let alone early-stage businesses trying their best to manage their operations, finances, employees, and most importantly, staying connected with customers.
There are a lot of moving pieces and countless decisions to be made right now, so board members are especially busy advising on governance and oversight. Addressing operating issues is also a big responsibility right now, as CEOs will want to know if any of the board members have gone through situations like this and how they handled it. Having served on over seventy-five boards in my life, I’ve gained some experience that I’d love to share during this rocky time. Here are some things you should be asking yourself as a board member:
- How can I be supporting the CEO right now? As I mentioned in my last entry about navigating times of uncertainty, I can’t stress enough the need to over-communicate. Things are changing daily, so committee meetings are crucial to review numbers and collaborate on the next steps. Whether these meetings are happening weekly, every few days, or every single day, the main point is that communication touchpoints need to be open-ended. Asking the CEO what they need is important, but you also need to have those hard discussions to settle any unresolved issues and work with other members to coordinate what’s best for the company. Make decisions quickly. Don’t defer, compromise or sit around. Decisions need to be made now. When a decision is thought through and ready to go, decide and execute.
- How can we get the support that we need? Not everyone has been through this kind of crisis and experienced such a massive downturn. CEOs with less experience need to lean on their board for direction and steady advice through these times. If the board and management are lacking experience dealing with tough economic times, consider bringing in private resources and someone more knowledgeable. If you reach outward, you will find people who have gone through something similar and are willing to voice their insight and advice. These individuals may be hard to find, and often the wrong ones will come up, so be careful when picking who to bring in. Check references from people that you know and trust before you ask anyone for support and help with advising the organization. Once you find the right person, including someone well-versed in changing economic times is a good way to keep morale up for the CEO and key management team and help the organization to move forward.
- What financing ideas can I present to the CEO? Good board members will be doing outreach and bringing value back to every meeting. A critical factor that every business should be considering is how to generate revenue now and into an uncertain future. Start researching various government grants and funding opportunities, looking into 0% interest or small interest loans, exploring different channels to raise capital, and bringing these financial plans to the CEO and board. New ideas are especially important during this time when it feels like all options have been exhausted.
- What value am I bringing to the board? The bottom line here is don’t waste your CEO’s time. Countless things require attention right now, so hone in on what needs the most focus. All members of the board and the leadership team need to be cooperating and contributing fresh ideas. Every conversation will have different needs and requirements, so instead of forcing all decisions on everyone, give people different areas to work on and prioritize.
- Are we prepared for a long-term pandemic? As much as we’re hoping to get back to business as usual, we’ve got to be realistic. The majority of companies should be cutting back even if they are adequately financed. Cash is extremely important and it is urgent that you are making quality decisions. We haven’t seen the full effects of this yet, so even a years’ worth of cash may not be enough. Everyone has a different story and issue—some businesses will be successful while others won’t—but everyone is going to suffer. The real question is: how will your board and management team navigate this challenge?
I’ll end off with some valuable words that have stood out to me during this trying time. Coming from Sequoia Capital’s note to their founders and CEOs, their team shared:
“Nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses.”
Here’s to hoping things get back to normal soon. I’m thinking of all of the businesses, executives, and board members out there, and wishing you success as we all ride out this wave together.