Boardwork and the coronavirus: What should be on the boards agenda this autumn?
What is happening at board level eight months after the coronavirus pandemic broke out? Are we heading for a new normal? Has board work been given a different impetus by what has otherwise been a very demanding and challenging time for companies, owners and employees?
Blog post by Toril Nag, Group EVP, Lyse AS
Now, in November, it is eight months since several of countries went into lockdown because of COVID-19. Over that time, both citizens and companies have seen their daily lives dramatically restructured. We have had to think and act in new ways, both at home and – as the country has gradually reopened – at work and school. Many companies have gone under from the devastation of their income base. Many people were, or are still, laid off. Some will never get back the job they had in March. Working hours, places of work and work activities have been turned upside down.
What is the status of the boards eight months after lockdown?
But what about the boards? Do the boards continue as before – or must we too recognise that we are heading for a new normal, where some of the crisis activities that most boards underwent immediately after lockdown will stay with us going forward? And might board work be positively influenced by what has otherwise been a very demanding and challenging time for companies, owners and employees?
The boardroom is changing: Is digital board meeting the new normal
AGMs have long since been conducted digitally. Digital board meetings worked so well during lockdown that many boards are retaining this format, for at least some of their meetings. This new meeting form reduces the need for travel and can also alter the rhythm of meetings, by replacing full-day physical events with a couple of shorter digital meetings. Boards that had not already adopted digital tools for summoning meetings, preparing agendas, signing minutes etc. – finally had to engage with the digital world.
Many felt the transition produced a better and more streamlined outcome. Of course, there remains a significant need for face-to-face meetings – but the mix of digital and physical has become a new normal for many boards.
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Should boards carry on as before in other respects?
When the pandemic struck, most boards held meetings quite quickly in response. They discussed what it meant for their business. That is, of course, the board’s remit. How were people to work? What about the customers? Can we deliver our products? Do we have the right tools for employees to do their job and make our value chain work? Will we survive? These were the questions on the table in many March meetings.
Naturally, the situation affected businesses differently. Restaurants and tourism faced, and still face, huge challenges. Telecoms and IT companies, on the other hand, have experienced greater demand than ever.
But now – with lockdown over in most countries, but society still in a new normal, and amid drastically altered conditions for many businesses – there are three things that should top board agendas forwards:
Three things that boards should place high on the agenda in autumn 2020
The first – and obvious one – is digital transformation. Most companies have been through a digital evolution, but crises also represent opportunities for change.
New digital value chains are starting to work – because society required them. You don’t need a crystal ball to predict that restaurant booking by QR code, contactless mobile payments and increased use of video conferencing solutions are here to stay.
Why did we have to wait so long for such obvious things? The same applies to the boom in online grocery shopping. Boards need to see the force of this type of change and respond more proactively.
Altered cost base
The second obvious factor is an altered cost base. In March, nearly all boards were preoccupied with how the lockdown of society would hit their business. This focus must continue – because things will never be quite the same as before. This can and must result in the board looking afresh at the cost base. Not least considering the digital transformation as mentioned above.
Altered customer behaviour and customer needs
The third is customer behaviour and customer needs. The driving forces of social change are technology, regulation, and what people will pay for.
There’s nothing like a crisis to change people’s behaviour. What does it mean for our business that people are going out less, but buying more, and more upmarket, food online? What does it mean for our business that many homes are being equipped for one or both parents to work from home?
What does a potential boom in staycations mean for our business? How does the fact that people want to experience more from inside their home affect film releases and other cultural events?
An urgent need to do things differently
It is tempting to see changed customer preferences as a passing fad, but they are not. Because – other things being equal – people prefer the path of least resistance. And improvements to the digital value chains that meet people’s needs – from ordering and payment to delivery – have accelerated and been perfected through the pandemic.
Customers who previously did not see the benefit of changing their behaviour were suddenly faced with an overwhelming requirement to do things differently. And when there is a big demand for streamlining, changes happen with great force.
Technological possibility is a necessary, but not a sufficient, prerequisite for change. In addition to good solutions, customers must want and be able to use the technology.
As a rule, they must be tempted and trained – but what teams of consultants and marketers would have spent years on, the virus trained us to do in a few weeks. Entirely new groups are using technology for completely different purposes than before the pandemic, and this happened at record pace.
More than ever, boards need to have their radar switched on, and to support and challenge their companies to maintain even closer contact with customers and monitor signs of behavioural change. These are not going to subside, even after the pandemic does.