Food for Thought

• DOI: http://doi.org/10.1002/bl.30177
• Published date: 01 November 2020
• Date: 01 November 2020

NOV.–DEC. 2020 3

market and how the management

team sees the market unfolding.

Understanding the underlying assump-

tions of your scenarios are also

critical to success. I have found that

key assumptions not identified and

discussed or a bad assumption can

lead to not achieving the outcome we

expected.

As an example, a salesperson is typ-

ically, inherently, optimistic. Whereas

an operations person, like myself,

typically sees what could go wrong. An

optimistic scenario for me, is probably

somebody else’s pessimistic scenario.

It is important to dive deep and really

understand where everyone is coming

from.

Plus, management teams have

tremendous pressure to be right, and

to come in and prove that they under-

stand the situation and its outcome.

It is uncomfortable to say, “Well, I

really don’t know,” but COVID-19

has changed that. Boards and man-

agement have become much more

comfortable managing uncertainty. As

long as you can track the assumptions

throughout planning and revisit them

continuously, that will be critical for

mitigating risk.

Oktem: There has always been a

delicate balance for boards between

the executive management role and

the oversight role. How do you man-

age that balance?

Kumbier: The management team

needs to leverage the wisdom of the

board and maintain clarity that the

board is not running the business, but

guiding decisions. We are continuing

with current governance processes

but adding to that discussions about

the current risks and mitigations for

COVID and how to be innovative and

think differently about the business

given the situation today.

Swan: During COVID, a lot of

boards were meeting once a week and

wanting detailed insight into the num-

bers. The situation was so new. So,

some boards did cross over the line

into management. But, from what I’ve

seen, we’re now back to equilibrium.

This is the time, however, when

strong boards get stronger and weak

boards get weaker. And the same

thing with management teams. When

you have a weak management team

or board, you have weak governance

and there can be crossing over of

responsibilities.

Oktem: There is robust research

showing when companies accelerate

out of a downturn, it creates a real

advantage. That can be tough for an

executive team to wrap their head

around. Where can the board play a

role in helping to create and catalyze

some of those conversations?

Kumbier: Oftentimes a crisis is

the best opportunity to drive creativ-

ity, innovation and new avenues for

growth.

To do that well, capital allocation

is critical. Continuing to evaluate and

ask what the priorities of the business

are and then investing appropriately in

your strategy as you manage the real

demands of the crisis. One approach

is to have a crisis management team

dealing with the day-to-day issues,

while the rest of the team remains

focused on the strategy. Even if a

company is going through a crisis,

there still needs to be a north star and

employees need to understand what is

the same and what may have changed.

The board can help to make sure that

the north star remains visible and

continues to be communicated to the

organization and all stakeholders.

Oktem: As individuals are position-

ing themselves to be on boards, what

do you think is different right now and

what should individuals be thinking

about compared to even six or eight

months ago?

Swan: Throughout all of this, we

have had to communicate with exec-

utives in ways not typical of a board

member-executive relationship. For

instance, some CEOs wanted to keep

doing business as usual – traveling

on planes and more. I reminded

them that those simple things could

be perceived as a bad example of

leadership.

Beyond that, many leaders simply

need an ear. I have spent time on the

phone with executives who simply

needed to decompress, so that they

could go back and be the leaders they

are. So, new board members should

offer a sense of maturity and the abil-

ity to listen.

Kumbier: Having a broader,

360-degree view of the business is

also critical. We know all the differ-

ent challenges that are hitting the

board room and that the manage-

ment teams are trying to balance.

We just talked about many of them.

Being multi-dimensional and being

able to provide your perspective and

your advice to management teams is

invaluable.

I would also add that from a female

perspective, we bring empathy to

situations and are often a bit more

balanced in our approach. When com-

panies are thinking through a lot of

these cultural and social conversations

– ESG, how the company is leading

in society and their standing in the

broader world – women, in particular,

can bring those traits and a strong

value to that conversation.

To read EY’s full report high-

lighting key priorities for boards

in 2020, visit https://www.ey.com/

en_us/board-matters/eight-priorities-

for-boards-in-2020 or read the fol-

lowing article for further insights

— https://milwaukeewomeninc.org/

board-agenda-2020-eight-priorities-

for-boards-as-they-tackle-the-covid-19-

crisis/.

FOOD FOR THOUGHT

“A leader…is like a

shepherd. He stays behind

the ock, letting the most

nimble go out ahead,

whereupon the others

follow, not realizing that

all along they are being

directed from behind.”

Nelson Mandela