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Boards under Covid

The 2008 financial crisis was a considerable one, but it mainly hit the financial sector. Moreover, it only lasted for a few months, although the world had to deal with its consequences for years. Our current crisis is a global health crisis that affects every single economic activity in every country around the globe. No one is immune, nor far from its effects. The crisis, since it started towards the end of 2019, is still in the making and is developing in different patterns in different regions.

With considerable pressure on corporates, boards and management, it might be a good idea to pause and reflect on what has been happening, not only to learn some lessons but also to identify areas of focus for boards during 2021.

We’ve seen massive business disruption, reduced cash flows and mounting bad debts and collectables. More importantly, the crisis poses serious health risks for employees, clients, business partners and the community at large. So, what do boards have to do to help corporates get out of this crisis as safely as possible?

Boards as think tanks

Traditionally, boards play different roles; they choose the management and guide it. They give an overall organisational direction, then they supervise management and assess its performance. In times of crises, boards have another key role to play: support the management and defend it. Boards need to act as ‘think tanks’ for their management.

The Covid-19 crisis is overwhelming; CEOs are faced with numerous challenges and have to make many tough decisions under uncertain conditions. They not only have to digest a lot of information and make analysis, but they also need to guess and assume to fill in gaps and make well thought-out decisions. The pressure is massive, and the risks sometimes are quite high. Boards cannot afford to leave the management to act on its own without giving support. This is not to say that boards will replace the management or step on its toes, but rather they should be beside it.

Gamal CEO Concern


A report released in 2010 by Nestor Advisors identified that banks that grew during the financial crisis had professional boards with relevant experience, and that those boards established either audit committees or risk committees that met as frequently as once a week to follow market developments and help the management respond effectively and quickly.

1. Strategy and business model

Boards need to discuss with the management the current strategy to see if it is still relevant; most probably not. This includes vision, mission and long-term objectives. The discussion must also include the company’s business model; the way in which it achieves goals. It is very much expected that such discussions will end up in agreeing considerable changes to strategy and business model.

2. Technology

The current crisis has shown that technology can make or break a business. It can be a key source of competitiveness and show the way to conduct business and run operations for years to come. The discussion will include things such as how can we make the best of technology, are we ready for it, what changes and upgrades do we need, and do we need to update our organisational structure? Do we need to make changes to policies and procedures? What are the risks associated with extensive use of technology and how can we mitigate those risks?


3. Stakeholders

The crisis has impacted key stakeholders – employees, suppliers and customers – and the board needs to fully understand what the effects on these are. What are the expectations of each group? How can we protect our employees yet keep them productive? What do our customers need from us and how can we deliver and cater for their needs? What is the best way to manage our supply chain? How can the organisation avoid any supply disruptions? Should we re-engineer our supplier network to cover for contingencies? What is the impact of all this on our cost, prices and profits?

4. Financials

One of the major risks facing organisations now is insolvency and eventual bankruptcy. If companies do not manage their cashflows carefully, they may face grave consequences. Boards must feel comfortable about the way in which management is handling liquidity and need to understand as early as possible if more cash will be needed if the company is to survive. If cash is needed, then when and how much and for how long, what would be the best sources, not only in terms of the cost but also in terms of risk?

5. Corporate culture

Boards are responsible for installing the right culture in the organisation. This can be done using different tools, such as key performance indicators (KPIs), an incentive structure, training courses and board-management sessions. Boards need to discuss whether the organisation has the right culture with management? Are we using the right KPIs and incentive schemes or do we need to change them? It is quite common in times of crisis and business downturn that employees and management, might take ‘short cuts’ to achieve targets and deserve bonuses. Boards need assurances that this will not be the case. Employees, too, will need assurances from the board that they will not be sacrificed and that they will not be the victims of the crisis. Boards need to figure out the measures they can take to protect employees without putting companies at risk of bankruptcy.


The above is not by any means a comprehensive list, but it serves to show that there is a lot that boards need to discuss with management and that they need to work together in finding the right answers. Discussions need to be frequent as things are constantly changing. Answers to the above questions will also keep changing as the crisis continues.

These are tough times; therefore boards and management need to work hand in hand in order to overcome the challenges and navigate safely through the massive storm.


Ethical Boardroom is a premier website dedicated to providing the latest news, insights, and analyses on corporate governance, sustainability, and boardroom practices.

Ethical Boardroom is a premier website dedicated to providing the latest news, insights, and analyses on corporate governance, sustainability, and boardroom practices.


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