A recently published article from INSEAD analyses how boards have actually reacted to the Covid-19 pandemic. The four authors of the article Stanislas Shekshnia, Veronika Zagieva and Maria Nazarova surveyed 266 chairs, directors and CEOs in 23 countries, mostly in Europe, between May and June this year and found that almost half of the boards have not altered the way they operate in response to the pandemic.
The article’s authors, also identified four broad patterns of response to the pandemic:
- Withdrawal: Approximately 15 percent of boards on which our respondents sat reacted passively to the crisis. They reduced or barely kept their time engagement with their companies. They condensed the scope of their work and made a limited number of decisions, mostly of a defensive nature (such as cost-cutting). They focused on issues at hand and rarely discussed the future. Other stakeholders – executives or shareholders – took the lead in navigating the company through the crisis.
- Engagement: Some 15 percent of boards increased the time they spent on board activities without adapting their processes. Board members put in longer hours and actively interacted with executives and each other on an informal basis, yet stuck to the traditional agenda in the boardroom.
- Adaptability: About 20 percent of boards increased their engagement with the company and changed the focus and the content of their formal and informal discussions. Some of them increased the scope of their work by adding extra items to the agenda, while others concentrated on a smaller number of items. They made both defensive and offensive decisions and actively discussed the future.
- Stability: Roughly half of the boards did not make any significant changes to the way they operated and spent the same or slightly more time on board work. Those boards kept the course – they worked on the same agenda with little amendments, preserved routines in spite of moving work online, and retained demarcation lines between themselves and management. Unsurprisingly, members of such boards felt that their boards were well prepared for the pandemic and were sufficiently competent to deal with the challenges posed by the crisis.
You can read the full article here.