Governance During Crisis: Some Thoughts on Board Leadership Amidst the Coronavirus Outbreak

For many of you, your credit union’s crisis preparedness plan is being tested as we speak. If it’s not, it likely will be within days or even hours. As a board, you will be challenged as well. TEAM Resources is here for you as you need us, starting with some thoughts on how to best govern during these challenging times.

At TEAM Resources we talk about the Governance Spectrum between boards that are 1) Too strong and too involved on the one side and 2) Too weak or disengaged on the other. The Goldilocks spot is right in the center: The board that governs strategically. However, by definition, times of crisis mean disruption and boards should consider how they can be more involved in ways that are helpful, not micromanaging, or getting in the way. Directors have a critical role to play here.

Support the CEO

The CEO is probably jumping from fire to fire. Make sure he or she has support. It’s easy to get overwhelmed during a crisis (and CEOs don’t like to ask for help). You can be a sounding board for an exhausted leader, but don’t get too far into the weeds or try in any way to take over decisions. You can simply support your CEO by checking in on his or her emotional health.

Getting More Information

Boards should be getting more updates as to how things are going. They don’t have to be minute by minute, or all of the details, but they should be beyond what is typical and normal as the organization is not operating as “normal.” Perhaps a weekly “Brief” would be the best and least invasive way to monitor what the credit union is doing and experiencing. As things are changing from minute to minute in this crisis, monthly reporting may be too slow.

Focus on Your Important Constituencies

As a board, you are there to represent the members; they are the constituency that we normally pay the most attention to. Keep them front in center as your focus and concern. But you have others: Your staff, vendors and community. The CEO is likely getting tunnel vision as he/she operates in crisis mode, moving from urgent to urgent. That’s the job. You can help by being the tether to those for whom you exist.

Accountability and Innovation

During times like this, your organization may astound you with its ability to innovate in order to help the members and protect the staff. That’s fantastic. Give them great leeway to do this. This does NOT mean forgoing accountability. It does mean that the rules and circumstances are changing underneath our feet and you must accept that. Some of the greatest innovations have been forged in the crucible of a crisis.

Reputation

“Times of crisis will inevitably test your reputation. A good reputation builds resiliency. A bad reputation adds to vulnerability.” (“The Board’s Role in Crisis Management,” Oster, Hoskin & Harcourt LLP, 2016) Make sure you have a plan as to who will speak for the credit union. It is usually best to have in policy (and in practice) that the CEO will be the only voice of the credit union. The board should defer to the CEO if they are asked by the press or anyone else what is happening at the credit union.

Leading From the Edge

The board has a unique perspective from the fringes or the edge of the organization. You know quite a bit more than the average citizen, but not as much as the CEO or staff. Chait, Kennedy and Taylor call this “leading from the edge” in “Governance as Leadership.” During a time of crisis this lens, or perspective, can be exceedingly valuable for the CEO stuck in crisis mode.

Executive Sessions

The board should be meeting in executive session as needed. Meeting without management present is often necessary to candidly discuss how the crisis is being handled. Be sure to follow the basic rules of executive session: 1) Don’t overuse it; 2) Use the meeting to protect people, not attack them; 3) Let the CEO know what you talked about as appropriate; 4) Keep minutes as appropriate – these are not “secret” meetings; and 5) Take no votes in executive session except the standard votes on CEO compensation and retention issues.

Meetings

One more thing about meetings of the board in general. Meeting in person probably makes no sense if each one of you is a potential carrier or victim. This is a perfect time to learn how to manage a remote meeting using GoToMeeting, Zoom or any virtual platform your board may have access to. Virtual meetings, where everyone can see and hear everyone else, can be challenging for directors to adjust to. But it is vital as this is where the world in remote human interaction is moving.

Strategic Plans

All of this has (not “might,” not “could,”) disrupted your strategic plan. When you get through to the other side, adjust accordingly. It is unreasonable to recover afterwards with, “So when will we be back on track?” Consider what the new track is. This will take time. Do not forget about strategy when this is passed. You will need to plan for the New Reality. Don’t put this off.

Post-Crisis Analysis

When this is over and behind you, make sure to discuss and document, in great detail, how the response was. It will be very tempting, and very easy to want to move past it and get it out of memory. This is a mistake. This is an event to learn from and use for identifying strengths and weaknesses within the organization so that they can be taken advantage of, or repaired and improved upon.

For sure every crisis is unique. It’s not easy to be fully prepared, but it doesn’t mean that you don’t try. That effort provides tremendous value. We have a bad habit as a culture of always fighting the last war and not learning enough how to be flexible for the next “unknown.” The board’s role in times such as these should change, in a calculated but flexible way, in order to support the organization.

Tim Harrington is President of TEAM Resources.

Kevin Smith is Consultant/Publisher for TEAM Resources. TEAM Resources is a Tucson, Ariz.-based firm providing strategic planning, training and consulting for trade associations, banks, credit unions, financial institutions and nonprofits.