NEDonBoard calls for boards to re-consider their board composition, review their succession plans and reflect on the skills and expertise that have been missing or need strengthening so that organisations are equipped to address the risks, challenges and opportunities that have arisen from the COVID-19 outbreak.
Do boards have the right combination of skills, experience and expertise?
NEDs can play a crucial role in managing this crisis. Boards of all organisations, private, public and third sectors need to act quickly and take decisive actions while facts may still be emerging, and knowledge may be limited. Non-executive directors, because they are in a non-executive role and not “in the business”, bring perspective, add insights and highlight alternative scenarios and potential outcomes.
Boards must investigate whether they have the right combination of talents to realise the opportunities that the COVID-19 crisis has created and meet the challenges that have emerged in the short-term as well as in the longer-term.
What skills and experience do UK boardrooms need?
In May, NEDonBoard surveys non-executive directors and board members. An impressive 35% of respondents reported that in their opinion: the composition of the boards on which they serve has not been adequate to address the challenges, risks and opportunities arisen from the COVID-19 outbreak.
Even when the board composition was assessed as adequate, respondents indicated that some skills, experience, and expertise needed strengthening. The top 5 skills currently most in need in UK boardrooms are contingency planning, crisis management, communication, risk management and stakeholder engagement. However, as of the end of May 2020, only 25% of surveyed NEDs indicated that the board has acknowledged gaps and will update succession plans.
A worrying 50% of boards have not acknowledged gaps yet. NEDonBoard urges boards to reflect quickly on any gaps and search for non-executive directors that can make a difference to their organisations by advertising positions publicly and widely. Because only well-publicised NED vacancies attract a high number of applicants among whose boards can select the highest calibre, the best match in terms of skills and the best fit in terms of boardroom culture and values. Boards can leverage the breadth and depth of the NEDonBoard community to appoint the right talents to join them.
Succession plans for existing directors should be on the agenda
Another concerning data point that the NEDonBoard study shows is that 55% of boards have not discussed or implemented succession plans : COVID-19 might infect one of the senior executives, including the CEO and the CFO or any of the non-executive directors or the chair.
During these turbulent times, boards need to assess their priorities. Non-executive directors can play a crucial role in supporting the executive team. This includes guiding and coaching the senior management team as well as identifying priorities. Succession planning must be on the board agenda so that organisations and businesses are equipped to address the challenges, risks and opportunities created by the COVID-19 crisis.
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