Tip #56 Boards and the Coronavirus Pandemic

Posted on: May 1, 2020
Tags: Tips for effective boards

Boards of Directors have the awesome responsibility to ensure that their organizations are prepared to respond quickly and effectively to emerging crises such as the coronavirus pandemic. 

Ideally, boards complete the following three important tasks before crises emerge: 

  1. Boards clearly state their operational expectations for management.
  2. Boards allow for sufficient flexibility to enable management to develop crisis response plans quickly and modify them as necessary to respond to any changes in an emerging crisis situation.
  3. Boards put in place an effective system for monitoring organizational performance (including in response to crises) and for holding management accountable for such performance.

 Boards using the Policy Governance® system have completed these three tasks: 

  1. Boards have clearly expressed their operational expectations for management in their Executive Limitations policies.
  2. Boards have provided management the broadest range of discretion they are comfortable with to allow for a quick modifiable response to emerging crisis situations. Executive Limitations policies provide the boundaries within which management is authorized to decide and to act.
  3. Boards have put in place an effective system for ongoing monitoring of organizational performance and for holding management accountable. Performance data included in monitoring reports to the board may be collected by the CEO, external parties such as auditors or consultants, and directly by one or more board members.

With respect to operational expectations, Policy Governance® boards have policies in place such as the following (which have been adapted from policies developed by John Carver and Miriam Carver):

General Operational Policy:  The CEO will not cause or allow any organizational activity, decision, or condition which is unlawful, imprudent or unethical. 

Policies regarding Employees and Customers/Clients:  The CEO will not cause or allow conditions, procedures, or decisions that are unsafe….

Financial condition:  The CEO will not cause or allow the development of fiscal jeopardy….

Absence of CEO (for example, in case of illness):  The CEO will have no fewer than two other executives prepared to take over with reasonable proficiency….

While the general policy above is broad, the three other policies that follow it are more specific.  In such more specific policies, boards go into as much detail as they feel may be necessary to provide their CEOs with the direction they wish to provide and with the range of discretion they wish to allow.  They may even choose to add details to such policies specific to the coronavirus situation if they wish.

Policy Governance® boards resist the urge to jump in and micromanage details of their organization's crisis response.  However, at any time, such boards may require the CEO to report to the board on how he or she plans to demonstrate compliance with the board’s expectations expressed in policies such as those above with respect to the coronavirus situation.  Such special focus CEO reports to the board are generally written but may be verbal.  Policy Governance® boards may expect to be assured by their CEO that their organization's crisis response is informed by credible information sources and results from consideration of various possible alternatives.

Please take the time to check out the Policy Governance® model.  It provides a comprehensive board governance design that promotes proactive board governance to ensure organizational preparation for responding effectively to emerging crises.  For more information about the Policy Governance® model please click https://www.BoardsOnCourse.com/policy-governance or contact me at jpbohley@gmail.com.  

 

 

Policy Governance® is the registered service mark of Dr. John Carver. Registration is only to ensure accurate description of the model rather than for financial gain. The model is available free to all with no royalties or license fees for its use. The authoritative website for Policy Governance is www.carvergovernance.com.