25 Jan 2021
Why under-pressure boards are looking to succession planning to create a new blend of executive skills and outlooks.
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With boards under intense scrutiny, examining their composition has become a clear issue in planning for a post-crisis future.
Speaking to 21 Chairs in Ireland recently revealed how the pandemic had changed their professional lives, and the workings of the boards they chaired. It gave us a unique perspective on a leadership grappling with the ongoing fall-out from the global pandemic, and considering the future.
It also showed clearly how leadership qualities have evolved even in the short time since our pre-pandemic survey of 200 executive directors last year, which explored how to build a board to face the future.
Exactly what kind of leaders are in demand in this changed world as we move from the sprint of COVID-19 crisis to the marathon of adjustment? Following from this, what is the best way to fill a board with the right individuals for times like these, and ensure that the board performs at its best?
New workscape creates new board challenges
As in many other contexts, the lockdown and its aftermath has accelerated certain trends and shed a new light on others.
There has been a need for boards to be strengthened in particular areas as they face an increasingly complex set of pressures and demands from various stakeholder groups, and raised expectations for societal engagement and corporate citizenship. And that’s not to mention extremely high levels of uncertainty about what the future holds.
We found that data and technology, consumer insight and the need for a broader market knowledge are strong themes.
“There is a need for the nominations committee to include consumer awareness and public policy understanding in their criteria for board appointments,” was a typical comment.
Reading the Zoom room
Undoubtedly, the world of virtual board meetings and working-from-home has had an impact on the way boards operate, and the skills required by members and Chairs. Few wouldn’t have noticed how challenging it was to read subtle signals in order to judge the mood on a Zoom call. As one Chair commented, “As Chair, I find I have to work harder to understand how other board members may be feeling about agenda items.”
Is a board fit for a crisis also fit for the future?
Many boards are looking beyond their industries to find the right mix of skills, knowledge and perspectives for the new landscape. If you don’t already have it in-house, and don’t have time to develop it, why not hire someone in, is one way of approaching the problem.
Beyond a mature attitude to risk, there is also a desire, as the situation evolves, for senior leaders that have more of an entrepreneurial mindset.
These leaders are able to challenge conventional models, bust open organizational silos and drive change through the application of the right technology. If the task is to ‘build back better’, then there better be the brains, skills and mindset to do it.
Don’t let the crisis narrow your focus
For Chairs in particular, there are specific demands to be met. For example, how to re-establish the
softer, more social aspects of colleagues’ interaction. And why it’s critical to avoid letting the crisis narrow focus away from continuing to manage all stakeholders, customers, staff, regulators, shareholders, revenue and so on. HBR underlined this recently, by pointing out that “if the pandemic has shown anything, it is the importance of each and every stakeholder group to a company’s ability to function, let alone thrive and succeed over time”.
Think through future leadership requirements
Knowing what you might want on your board is one thing, finding the right person who is actually the right fit is wholly another. Here, the chairs and boards we interviewed agreed that succession planning is more important than ever and needs to be considered at both executive and non-executive levels.
As we pointed out last year, strategic succession planning starts with thinking through future expertise requirements and anticipating potential talent shortages at the board level.
Although the timescale has been truncated by the current crisis and future scenarios are less clear, the same principle holds true today.
Certainly, we suggest thinking of board appointments as a talent pipeline that deserves your constant attention, and not an afterthought or knee-jerk reaction to a resignation. It is far too important with implications for the health of your corporate culture.
Lightening the load of board matters
Understandably, current pressures often leave little internal leeway to concentrate on a rigorous and thorough succession planning process. We can help organisations to shed that load, or at least share it.
Ultimately, we are there to determine that there is a pipeline of credible and relevant successors for the Board, CEO, and for other executive and critical roles, always offering an objective view on the mitigation of any risks.
It is clear that Covid-19 and the subsequent economic shock has made the jobs of Chairs and board members more demanding. It has meant more time on the job, more frequent high-stakes meetings, more deliberation on immensely complex issues, not to mention demanding a high level of personal resiliency. It has also reminded us of the importance of a well-balanced, well-led board and their ultimate role of being good guardians of the organisations they oversee, and the wider public they serve. Whatever the circumstances.
If you would like to discuss any aspect of board leadership or succession planning, please don’t hesitate to get in touch.