As the COVID-19 pandemic evolves, boards must turn their minds towards recovery and not lose sight of their overarching role and responsibility for effective organisational governance, strategic direction and planning.
At this critical time, boards should ensure they maintain a focus on the future. Pre-COVID-19 strategies, business plans, assumptions and forecasts must be assessed to ensure they are fit for purpose in a post-COVID-19 economy. Similarly, existing risk management frameworks, crisis management plans and business continuity plans should be reviewed and updated to capture lessons learned and reflect post-COVID-19 requirements.
As slowing infection rates point to a period of tentative stability, what are the key considerations and the questions that boards should be asking? How can a board best position their organisation, not only for survival but also success? Below are several key areas that boards should be focussing on over the short to medium term.
Critically assess and update strategy and business plans
Existing strategy and business plans should be reviewed and updated to reflect the short-term economic impact of COVID-19 and changes to the organisation's operating environment, especially around customer demand and supply chain security.
Review crisis management and business continuity plans
These plans should be reviewed and updated to reflect learnings from the COVID-19 pandemic.
Assess risk management frameworks
COVID-19 has shown there are significant risks to financial stability, operational capability, capacity to meet contractual obligations and commercial relationships arising from pandemics. Existing risk management frameworks should be reviewed and assessed through this lens.
Analyse cash flow, financing and capital structure
Consolidating the organisation's financial position is critical during times of crisis and requires consideration around cashflows, revenue, liquidity, existing finance, availability of future finance and capital structure, but boards should not lose sight of what comes next.
Stakeholder relations and external communications
Now more than ever boards need to be mindful of competing stakeholder expectations and ensure an effective communication strategy is in place.
Digital presence, technology capabilities and cybersecurity
Government mandated shutdowns of physical stores and services and increasing social distancing measures have reinforced the importance of having a strong digital presence and technology capability.
Focus on the ‘road to recovery’
It is essential that boards now refocus their attention on their primary governance role and plan the 'road to recovery' by ensuring their strategic direction remains fit for purpose and they maintain adequate oversight of key risks and opportunities for the business beyond COVID-19.
Extracted from K Towey and C Ashton, 20 April 2020, COVID-19: Boardroom oversight of recovery strategies, https://aicd.com.au/resources/covid-19