7. George Davis on what boards need to do in a crisis: Listen aggressively - but fight the urge to grab the wheel.
George Davis has been a trusted advisor to multinational, public sector and private equity backed organizations seeking guidance on critical boardroom issues for many years. We discuss with him what boards of directors need to do in a crisis, how this crisis is different from those in the past and what it may mean in the future for companies and the boards that serve them. Thanks for listening! We love our listeners! Drop us a line or give us guest suggestions here. Links https://davispartnersgroup.com/ Quotes A good board member understands their role and how to be supportive from a governance perspective and to fight the inclination to become a part of the management team. 10:38 I try to counsel people to say, look - this is when the CEO needs more room to breathe, to be able to pivot, to react. Don't choke him or her with a hundred questions because you're concerned about something you have not agreed to that the board thinks is a concern. 11:44 Some of the fundamentals that have always been true will, post crisis, be even more of a focus as it will be clear how important they were. A truly diverse board, with many different perspectives and skillsets, is far more likely to be able to advise their CEO than a board that wasn't as well constructed. 17.19 I have a strong belief that after this crisis board appraisals and board succession planning will become a hot topic. Just like CEO succession planning became a hot topic after the 2008 crisis. In each case the question will be: did we have the right people around the table? 19:36 How do you layer the competencies and the matrix skills of the board to match where the future of the company is going to be? And with this huge consumer disintermediation that's going to happen post Covid-19. Fight the urge to be false predictions of overconfidence. Be extremely clear in your communications, honesty right now is way more appreciated than anything. So, if it's uncertain, say it's going to be uncertain. If it's going to be hard, tell them it's going to be hard. I think false positives destroy morale. 25.50 Ideas/Comments Crisis management protocols and feedback loops and risk mitigation are pertinent to today's crisis, but in the past, everybody felt that it was either an economic turn or there was a cycle and we’ll pop out of it. The magnitude of change in board rooms today is quite different. If you've developed a strong foundation of trust and transparency with your CEO and their team then it's going to be a lot easier to say: “Go do what you got to do. We just need a briefing. We need a one hour. We don't need a long board meeting, for example, because we know you're going to do the right thing. We know you're going to tell us what we need to know, and we know you're going to tell us the truth about it. We trust you.” The boards that don't have that relationship are going to struggle ansd it's going to highlight this fundamental thing that we talk about all the time about having that relationship with the leader of the company.