The challenge of the pandemic – one of the biggest crises the world has faced in generations – necessitates that boards step up and provide additional value to the organisations they lead.
Boards continue to focus on having their four lines of sight we recommend and help enact effective processes to ensure that each perspective adds value:
- Oversight: Boards must have processes in place to ensure effective oversight and accountability.
- Insight: Effective boards understand the company, the financial engine and competitive edge of the organisation and the external business environment. This insight drives a more objective and enabling assessment of performance and strategy.
- Foresight: The ability to anticipate, to see what is coming and the future forces that will impact the competitiveness and sustainability of the business is critical to effective understanding of risk and development of strategy.
- Hindsight: Effective boards can bring significant company knowledge, the hindsight to remember previous initiatives and reflect on the good, bad and ugly learnings from the past.
The following essential policies cover director reviews, succession planning, inductions and board support.
Dealing with the fallout since the global pandemic was declared, now is the right time for reviews of the CEO, board and Chair to take place. The Chair needs to organise 360° performance reviews to ensure those on the board are fit for the future. Reviews should comprise of qualitative and quantitative research based on interviews and online surveys.
It’s important to start with a review of the CEO –after all, their role is to lead the organisation into the future.
At the end of the review process, there must be clarity on the next steps, with clear expectations and deliverables confirmed for the CEO and directors, agreed by all parties. Warning to note however, – your policy must stipulate how any approved training will be organised and take place (via a Company Secretary or Chair, for example), as well as help with the transition of those not right for the role.
Whether the CEO or directors are up to scratch or not, there must be a policy that will allow the Board and Chair to help facilitate succession planning. To ensure business continuity, it’s critical the right CEO is employed. This could mean looking internally at the depth of talent below the CEO or possible candidates at other organisations. After the board identifies a potential candidate, they could be mentored by a director over several years, so the right candidate can seamlessly become CEO when the time comes.
Ensuring that there is a successful functioning of the induction process for directors – something that’s more important than ever in the virtual world we currently operate in. This is an area that organisations can be very hit and miss. The goal is to ensure all new appointments to the board make a valuable contribution as early as possible they should look at the induction process as an 18–24-month journey. This means new joiners must no longer be left with a box of reading material and told to get on with it, as was often the case in the past. The person allocated in the policy needs to make sure formal governance training is delivered, so the new starters learn about liabilities, risks, financial competence, including how to be effective in board meetings. Perhaps set up a buddy system with an established director so the new board member can learn about previous decisions and how things work. Also, make sure to arrange a programme of visits and experiences so the incoming director can really get under the organisations skin, and the organisation should seek immediate feedback so the induction process can continually improve over time.
The pandemic revealed risk processes at many businesses that were academic, impractical and in some cases simply unworkable. Too many boards were blind to critical business risks. A robust strategic risk policy needs to be in place to ensure the board evaluates future risk. The management needs to work closely with the board to challenge their understanding of it and, therefore, their appetite to risk and ensure they effectively prepare for the future. This approach should help enable the board to spot and turn any future risk to their commercial advantage and secure the long-term survival of their organisation.
Ensure your policies are kept up to date, ensuring that the appropriate board support is in place. Company secretaries can be an invaluable resource. The better boards have recruited company secretaries or have allowed their current company secretaries to broaden their administration remit to become facilitators and enablers of critical board processes.
The role of the company secretary in supporting board effectiveness can sometimes be overlooked. They provide a valuable service as a repository of corporate knowledge, regulations and good governance. As a result, they are often indispensable in supporting the effectiveness of the board and particularly in assisting the Chair.
With the attention of boards focused on navigating a way through the pandemic, the company secretary must evolve their role to ensure the board continues to carry out critical processes that deliver good governance and effective decision making. Company secretaries need to broaden their role to become facilitators and enablers in the areas of oversight through to foresight, director reviews, succession planning and inductions, as well as in risk and strategy.
They must also maintain their other key duties in governance and administration. These include governance health checks, drafting policies for the board and implementing them, and handling all the administration around board meetings, amongst others.
For those organisations lacking or requiring the support of a company secretary on a project or ongoing basis, we can help by outsourcing company secretarial services. We provide company secretaries who are dedicated to your good governance. They are enablers who maintain compliance and high standards on corporate governance, while going 'above and beyond' to support the overall effectiveness of your board, so you can focus on running your business.
We support organisations without sourcing company secretarial services for short periods, ongoing part-time roles or for specific tasks.
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