We all know that this pandemic has brought a lot of change in many aspects of our lives in some way or the other. This is no different for leaders of organisations.
Since the onset of Covid-19, organisational boards have faced a string of difficult decisions. This year, with Covid-19 decimating the economy and bringing about looming uncertainty on the depth and duration of the crisis, decision-making has became a complex matter of weighing-up and balancing multiple factors — at least for those companies prepared enough to consider it at all.
With the rapidly developing situation, we are still yet to understand the impact of Covid-19. The potential future opportunities, gained or lost, by boards opening or closing themselves to these opportunities, have had significant impacts on the human-beings in organisations. The rise of numbers of employee's being laid off or furloughed have signalling effects of declining economic growth.
Though there have been various start ups and vacancies arising out of the ashes of Covid-19, the factors above are complicated and are challenging the governance and decision-making within organisations and boards.
What is beginning to emerge, is that the pandemic has made clear that society depends on well-functioning companies, in order that it meet basic needs — for food, shelter, health services...you name it — and that companies do not exist solely to maximise return to shareholders.
It follows that boards, which by law are a company’s governing body, should be increasingly concerned not just with financial returns to shareholders, but with the full range of factors that enable the company to create value over time, and this to all stakeholders.
Paradoxically, this enlarged purview does not diminish a boards’ accountability to shareholders, but it does imply there are changes in the nature and scope of that accountability. It also pushes boards to re-examine their purpose and role in society.
Thus, in the post-Covid era, they will want to assess their readiness to meet the new demands, and develop a strategy to address any gaps they find. At this moment, when old assumptions are being questioned, leaders will also want to ensure that their members have a shared understanding of the board’s role and responsibilities, and of their own individual roles and responsibilities as directors.
In the flurry of Covid-inspired activity, it has perhaps never been more important that boards do not lose sight of the governing bodies and stakeholders they serve, or the communities they are an integral part of.
This blog was written with the support and insight of one of our contributors. Thank you, Divya. As an MBA student specifically interested in marketing and culture, she is a contributor to the Perrin Carey blog. If you would like to contribute to moving governance forwards towards a more ethical and human centric framework, please contact Perrin.