‘Business as usual’ is no more (neither should it be ‘boards as usual’)
As the world learns to live with coronavirus – at least until the arrival of a proven vaccine – all eyes will be on how businesses remodel and adapt themselves to a landscape completely different to the one left behind in the pre-pandemic era.
For many, their sectors have been turned upside down and may not even exist as they once did. The aviation sector may struggle to ever see the same volumes of business that it once enjoyed, for example, while retail and hospitality are coming to terms with a whole new approach to running their operations against a backdrop of social distancing and new, stringent hygiene requirements.
At the heart of every big organisation, the board of directors will be wrestling with these existential problems and striving to reshape their business to create a more sustainable future; one where the measurements of success no longer sit squarely on the financial pillars of the balance sheet.
The boardroom imperatives
The board’s role will be integral in helping ensure their business adapts and succeeds in this changed environment but it requires board members to fundamentally reassess how they both support and challenge the leadership team.
This new board approach is likely to focus on two imperatives:
- Shift the goal posts
The pervasive culture of collection – collecting income, profit, savings, and quality will have to change if society and businesses want a very different world. The board must be ready to advocate the reset of an organisation’s success metrics that no longer have their foundation in power and money.
It was the economist Milton Friedman who pioneered the idea that “The Social Responsibility of Business is to Increase Its Profits,” and a firm’s main aim must be to maximise profit for shareholders. But this theory looks vulnerable in the context of a pandemic, not to mention climate change, widespread inequalities, and an increasing awareness of the role that businesses have to play in forcing societal change towards a more sustainable and ethical approach to commerce. The targets set for leadership teams by boards must reflect this changing mindset and the increasing influence of ESG factors.
- Review the skillset
Just as the need to change how success is measured, those same themes of sustainability, stakeholder trust, environmental responsibility, and risk analysis will force the board to consider whether it has the necessary skillset to help the business address these new challenges. If it doesn’t, it will need to either upskill existing board members and/or add individuals to the board who can bring that valuable new perspective to the table.
No more BAU
The opportunity to think big for the long-term future of the business has arrived and the board will need to play a key role in setting new goals. Those who understand that things can never go back to the pre-pandemic world will help their organisations win through, but those who think that it’s a return to BAU will ultimately founder.