EMBATTLED COMPANIES NEED THE RIGHT DIRECTORS: To contribute effectively during economic uncertainty, directors need candor, care, curiosity and humility.

• Author: Hayes, Bill

Serving on a board can be a challenge in uncomplicated times, but the task becomes elevated when a company hits a rough patch, such as a drop in the stock price or a general lull in the economy. We spoke with Dr. Charles Zimmerman, director of Univest and Clemens Family Corporation, to get his views on the types of individuals a company needs on its board in times of crisis or trauma and steps boards can take to ensure they have the right people on their board to suit the situations they are going through.

Directors & Boards: What sort of individuals or committees do you think are essential to have on a board during times that are tough, such as a rough economy or when stock prices are down?

Charles Zimmerman: The standard standing committees (executive, audit and governance) enable a board to handle most routine issues and concerns. It is important to remember that all board committees should be working committees. They are accountable to the full board, but the full board should not function as a committee of the whole, revisiting in detail all the work of the committees.

Directors need candor and care. They have the responsibility to speak up, offer credible challenges and share their opinions or perspectives, but that straight talk must come in the context of care for other directors and management. These qualities are necessary all the time but become absolutely essential during difficult times.

Occasionally, during tough times, it may be prudent for a board to establish an ad hoc committee to investigate a particular issue and offer recommendations and proposed initiatives. I have found it helpful at times to populate some of these committees with non-board members: senior management and outside experts, to name a couple. If an ad hoc committee is going to be established, the charge should be clear, the expectations delivered in writing and a date when the committee's work is due should be established.

DB: Are there individuals that are key to have on the board during difficult stretches, but then become not as useful when things are going well? If so, how do you handle that?

CZ: Critical thinkers immediately come to mind. These people can quickly process data and propose possible ways forward. They usually aren't just steps ahead of others, but yards ahead. They also tend to be impatient waiting for others to catch up. The problem with critical thinking is that there is a fine line between critical thinking and just being critical...