So, we’ve now set ourselves up working at home. What areas should we be looking into now that the tactical actions have been taken in the short term? Is your attention now turning to how you can continue to operate as a company board? How will you have your next board meeting in lock down? What about your AGM?
What you do now may be a precursor for how you operate in the future, dare I say in the “new normal”.
Now more than ever, company boards need to be proactive and agile, and they need to respond with strong leadership. There are numerous strategic, operational and policy concerns impacting both the short and longer term, here are some points on how you might use technology for your ongoing strategies and also short-term board meetings.
Directors can be using the vital links you now have with employees through video conferencing (Zoom, GoToMeeting and Teams) and social chat applications (Slack, Facebook, etc) to check on your employee’s wellbeing. Any methods need to be simple, authentic and timely, and often.
With the company boards responsibility for risk and strategy oversight, you will want frequent communications with management on the impact the crisis on operations and the execution of strategic initiatives. Additional discussions will be needed in light of current circumstances, changes to capital investment strategies, supply chain issues, workforce planning and cost reduction efforts.
Creation of online dashboards, if not already in existence, may help with the real-time needs for updates that can be shared with directors and leadership teams.
Supply chains continue to be disrupted. Many companies will be operating in triage mode, and the ability to balance supply with demand may be impacted for months to come.
In the short term, company boards should provide oversight for ensuring the company is proactively managing relationships with key suppliers and customers. Again, technology can assist here by ensuring there are good communication links to stakeholders, and directors may want to reach out to their peers in the supplier/customer network.
In the medium term, directors should be asking for the assessments from supply chain risk assessment and scenario modelling. Company Boards should also be looking into whether increasing workflow automation could mitigate future risk and if the supply chain operating model needs to be revisited.
Financial reporting operations. As business continuity challenges escalate, companies may experience issues with “closing their books” on a timely basis. Companies finance teams may be operating now in business continuity mode, processes that are not designed for lengthy operation.
If not already done so, now might be the time to look at automation of some of these back-office processes using robotic process automation, thus improving productivity both in the short term while working remotely and longer term this may prove to be an improved approach.
Audit committees will have an interesting time reviewing these potential workforce issues, and the company’s ability to meet original or modified deadlines. Ensuring that internal controls are still functioning effectively, while virtually, should be a continual focus. Your board should be looking at how management is treating social distancing effect on the way people work and use this as a trigger to revisit business risk, control risk and the effectiveness of the related controls.
Use the reporting tools available to model cashflows. With lower revenue resulting in less cash flow, delayed receivable collection, and the need to pay payables faster to support key suppliers or related issues. Cash flow management will require close scrutiny in the months to come.
Tactical view – can I keep my board running using technology?
Leading in a crisis
Mission and value statements alone do not create a company culture. Directors will want to ensure that they portray the right tone and company culture, especially as there are changes in the operation of the business with working from home practices in place. Issues that are formally raised to board level will require investigations to be carried out virtually, so consider how this will be achieved.
Communicating virtually can be a significant barrier to establishing and maintaining relationships with geographically dispersed board members. Tone of voice, facial expressions and environmental context often contribute a great deal of meaning to your speech, and these factors will almost always be absent in your communications with remote board members and employees. The use of web conferencing should be encouraged as much as possible, and is proving effective
Electronic signatures / written signatures
JFSC have made recommendations during the crisis, including the allowance to accept digital or scanned signatures, or an email confirmation of signature. This could be the start of a wider acceptance of electronic signatures across industries and wider adoption of electronic communication.
How to run a virtual board meeting
In terms of the law there is provision within Jersey Companies Law (1991) to operate electronically, as long as the company articles allow for that flexibility.
Directors of a local company do have to be resident in Jersey, and there is no requirement for directors’ meetings to be held in Jersey. If your board does not already have the capability to distribute board packs electronically, this might be the time to start. Applications such as Board Packs or Microsoft Office365 make the sharing of board documents, annotating and documenting minutes electronically all very feasible, and with minimal training for directors.
It is permitted for meetings to be held other than physically, given each attendee has the same access via telephone or video conference. Provision is also made to allow resolutions to be passed in writing.
Annual General Meetings could be held virtually as long as the article of association are followed in terms of giving shareholders notice and all documentation, and the virtual meeting gives the ability to vote and pass resolutions.
There is an opportunity to use technology to your advantage, which can help to involve the whole entire board of directors in important discussions. Using the right technology will allow you to achieve more personal contact through the use of web conferencing and collaboration tools that are relatively easy to set up. Involving the whole board in conference calls and virtual meetings helps to bring a sense of camaraderie and shared problem solving as we navigate through this crisis.