Among the most important factors to consider for companies contemplating board meeting management services are how well-prepared their board is to tackle a crisis scenario, and what exact role the board should play in its resolution. While corporate settings sometimes see dramatic events, these turn into crises when they begin to pose a significant threat to the financial performance, reputation or key shareholder relations of a company.
With research suggesting that companies – especially larger organisations – can expect to face a crisis every four to five years on average, it couldn’t be more crucial for companies and boards to know what to do when one arises.
How do crises originate?
Not all crises, of course, are the same. Some large-scale crises, such as natural disasters, public health outbreaks or terrorist attacks, can arise suddenly, whereas others may be much narrower in scope, perhaps concerning the damaging behaviour of an employee or the unexpected illness or death of the company’s founder.
Crises do not always occur due to single events, often arising as a result of multiple events that are relatively innocuous in isolation, but harmful in quick succession. Crises may be internally led, occurring due to the likes of performance failures or safety incidents, while others may be externally led, springing from security incidents or issues related to policy.
Whatever the nature of a crisis may be, when it is extreme, the entire viability of an organisation can be put at risk – although, thankfully, the board can play a key role in resolving it.
Effective boards set the tone for crisis resolution
As outlined by policy and governance consultant Caroline Oliver, there are several things that crisis-hit companies require from their board. These include a consistent hold on a clearly stated vision for how things should be, as well as a clear, consistent and regular demand for accountability from the chief executive to restore that vision as soon as possible.
Ms Oliver has also said that a board should have an incisive understanding of where the organisation is in the meantime. However, she has also warned that boards should not allow themselves to “get directly involved in the ‘how tos’ involved in fixing a crisis”, stating that it should instead be the “‘setter of the tone at the top’, and, as such, when crises hit, it needs to keep its head, to holds its position, to stay in control.”
The board can lend vital know-how in a crisis
With the business world rarely presenting companies with a second chance to avert a crisis, it is imperative that the necessary systems, programmes and procedures are in place to help any crisis-stricken company to cope.
The details of ‘who does what’ should certainly be clearly understood, but the board should also be allowed to ‘set the tone’ and provide the expertise that is required to help avoid crises, deal with them when they do occur and minimise the damage after the worst of a crisis has passed.
Enquire now to London Registrars to learn more about the potential relevance to your own business of our highly rated board meeting management service.