The Covid-19 pandemic has impacted every aspect of our lives, including the workplace and corporate culture. One of these major changes is the way board meetings are conducted.
Perhaps the most obvious change has been the shift to virtual meetings, which have become part of many companies’ new normal, even after lockdown restrictions have been eased in most countries.
As well as reducing travel and boosting attendance, switching to a virtual environment has allowed boards to improve governance through shorter agendas, more concise presentations and more candid conversations.
More importantly, experts agree that in a post-pandemic era marked by different consumer behaviors, new ways of working and altered company structures, boards could play a crucial role in terms of providing CEOs and their teams with foresight and sound judgement.
In this article we examine how boards can help to steer companies through these challenging and uncertain times with adequate planning and guidance from IROs.
Virtual board meetings are here to stay
The Covid-19 crisis forced corporate boards to adapt and innovate by replacing in-person with online meetings held via Zoom, Teams or Skype, provided their Articles of Association allowed this (see our blog from May 2020 on remote shareholder meetings).
Surprisingly, many board members found that using virtual meeting technology enhanced rather than hindered the quality of meetings to the extent that many boards have decided to continue holding online meetings or a hybrid model.
More than half (54%) of the board members, executives and governance professionals polled by Pricewaterhouse Coopers (PwC) in June this year said they would continue to meet virtually some of the time and 34% said they were open to hybrid models, mixing in-person and online meetings. Only 10% said their boards had not made any changes.
So why have virtual board meetings proven so successful and why are many companies refusing to return to the way things were?
In The Upside of Virtual Board Meetings, the Harvard Business Review interviewed members of the boards of Uber, Colgate Palmolive, Coca Cola, Apple, Amgen and Chevron, among other companies, who listed the following reasons why the shift to a virtual environment had enhanced the quality of their meetings:
- More time to prepare and focus. Board members were encouraged to read materials in advance and exchange feedback before the meeting using file-sharing services and secure chat platforms, which led to shorter and more focused agendas, which in turn meant the meetings generated better insights.
- Better dynamics around the board table. Whereas sitting around a large table can create different experiences for each member depending on where they are sitting in relation to the main speakers, using Zoom allows board members to make eye contact with everyone at once, which improves focus, and leads to more inclusive and bolder conversations.
- Reducing travel has increased participation
A crucial role for boards in the post-pandemic world
Every organization has faced different challenges during the Covid-19 crisis. While the pandemic pushed companies such as J.C. Penney, Hertz and CMX Cinemas to bankruptcy, online retailers such as Amazon, and food delivery services such as Uber Eats, gained weight, which means “there is no one-size-fits-all answer for what a board should do” in the aftermath of the pandemic.
According to McKinsey & Company, new consumer behaviors, a new workspace and different industry structures will be the hallmark of the new post-pandemic era. For companies’ boards this means adapting to the new normal and carving out a new role for themselves, experts say.
McKinsey & Company highlights the specific ways in which boards can support management teams and help them to make the best decisions for each organization:
- Ensure the company has a strategic crisis-action plan and prepare a response to future shocks.
- Ease the pressure on the management team by reviewing communications plans and reputation-management strategies, as well as engaging with external stakeholders.
- Share crisis management experience.
- Balance short-term priorities, such as ensuring effective cash management and financial stability, and long-term priorities, such as preserving the company’s competitive advantage by investing in digital transformations or improving customer experience.
- Encourage management to undertake a strategic reevaluation, which could include re-thinking the company’s product-market focus, customer engagement or technological innovation.
- Encourage management to review the company’s operating model.
- Maintain an open and honest dialogue with shareholders and other stakeholders.
- Help the management to better understand changing business conditions, how competitors are evolving and where they are investing in order to re-think the company’s own purpose and value proposition.
What about IROs?
In this new post-pandemic business world, IROs also have a crucial role to play in terms of bridging the gap between management, the board and company shareholders, says Roy Ling, CEO and founder of FollowTrade.
According to Ling, management and the board are often out of touch with company investors and therefore lose sight of what they are thinking and which issues they regard as crucial. This is where the IRO must step in and try to bridge the gap by ensuring all stakeholders are on-board and ready to support the company’s new post-pandemic strategy.
Contacts at Miranda Partners