COVID-19’s impact on business and industries cannot be understated. The Global economy has been turned upside down and leaders are scrambling to cope with the chaos. Recently, the Singapore Institute of Directors (SID) collaborated with Russell Reynolds Associates to connect to boards in Singapore on how they are managing the impacts of the pandemic.
Findings from the study suggest that most respondents are focusing on issues immediately relating to the COVID-19 crisis and how to navigate around them. For the moment, future planning and building on opportunities have been put on hold.
Despite the rather bleak situation, the general sentiment shows confidence and cautious optimism. A significant majority of respondents consider their companies to be well organized and prepared to weather the COVID-19 crisis, with 63 percent identifying their companies as “Very Resilient” or “Reasonably Resilient” in confronting negative outcomes due to COVID-19, and 88 percent confident in their board’s organization and clarity of responsibilities and roles across board and management.
“This global pandemic has brought many economies to a standstill, ours included. In its wake, many businesses are scrambling to grapple with the economic fallout that is bound to follow. As fiduciaries, directors are at the helm, working alongside management as they lead their companies to navigate this crisis. This will be a test of leadership, governance and foresight, and the companies that will thrive are those which have succeeded in reacting well to the short term while readying for the era beyond COVID-19,” said Russell Reynolds Associates’ Board & CEO Advisory Consultant Alvin Chiang.
“Looking back at past crises Asia Pacific has endured, the region is at a crossroads with COVID-19: a crisis that impacts us in dimensions beyond business. The survey’s insight is telling of how boards are preparing and thinking about the changing role of leadership in today’s world, as well as what it means to be ready in times of uncertainty,” added Stephen Langton, Russell Reynolds Associates’ Board and CEO Advisory Lead in Asia Pacific.
According to the Russell Reynolds Associates, issues that boards need to address essentially boils down to two major challenges; that of planning ahead, and leadership and culture.
Fifty-nine percent of the board’s time is spent dealing with the current impact of COVID-19. While addressing a company’s immediate needs is necessary to ensuring its survival, it is also important to then look ahead and consider what lies beyond COVID-19. This is involving boards putting aside time to re-examine business strategies that were developed pre-pandemic.
Leadership and Culture
During this period, to get the information and pulse needed for decision making, directors will choose to “walk the ground” more and gain a better feel of the situation. The issue of board overreach is often discussed during the handling of a crisis. While the survey listed “ability to navigate board-management relationships well” as a low priority for leaders, during a time like this, each board needs to find its own new balance with management on how to increase its oversight to appropriate levels. And achieving this balance is predicated upon open communication and good dynamics between the board and management.
The report also included several other interesting insights. Among these were:
Resilience and readiness
The majority (63 percent) feel that their companies are resilient and ready to deal with the negative economic outcomes of COVID-19, identifying their companies as “Very” or “Reasonably Resilient.” There is relatively high confidence (more than 80 percent) among respondents on their board’s leadership, organization and communication in dealing with the crisis, indicating agreement (“Agree” or “Strongly Agree”) with the board’s readiness.
When asked to rank stakeholders in order of priority on making key business and strategic decisions during this current crisis, employees emerged as the top priority (with close to 50 percent of respondents selecting this as Priority 1), while Environment was ranked last by more than 60 percent of respondents.
Effectiveness in Leveraging Technology
The majority agreed that their company has been able to effectively leverage technology and drive innovation in adapting to the current business environment.
The most important leadership trait for both boards and management was the ability to cope with complexity while exhibiting flexibility to make decisions. At the other end, the ability to navigate the board/management relationship emerged as the lowest priority for both boards and management.