In the last two months, many board meetings have been convened at very short notice in response to Covid-19, but where is your board risk committee (BRC) and what is it doing to ensure that these full board meetings are as well-informed and effective as possible?
Whether in financial services or not, the good BRC chair will consider themselves personally accountable for providing the leadership required to deliver against the agreed BRC ‘terms of reference’.
With a small number of independent directors as members it is quite practical for the BRC chair to contact each individually to understand their ability to contribute immediately and in a substantial way through the next few months. Location, personal health, enthusiasm or conflicting commitments (including over-boarding) can affect the contribution of independent members when it counts.
The BRC chair can also ensure that the main board chair knows what BRC efforts can be relied upon, also how they leverage and fit with the wider board skill set and resources, to ensure a coordinated rather than duplicated approach.
Normally the executive team, led by the CEO, will create a crisis task team and allocate an owner and sufficient resource, with a direct line of communication to the board and key committee chairs to integrated risk, finance, people (including skills and succession) and other governance and stakeholder matters.
Company secretaries have been able to assist with the move to support board members ‘working from home’ including the provision of online board packs, video conferencing tools and even basic equipment such as laptops, tablets, audio and video equipment etc. Remote setup assistance might be needed, including some ‘encouragement’ for those previously unwilling to work with anything other than paper board packs of binders and tabs!
Proper processes still need to be observed, with meetings being quorate, minute taking and formal approvals properly executed, which can require electronic document and signature management and even novel solutions to provide the final few ‘wet’ signatures still found to be needed.
New problems need new thinking so the membership of the BRC may need to be supplemented with additional diversity of skills, experience or thought, from the wider board or from external sources. These are times when your network efforts will pay back, when you can contact people at any time, through any method, and they will engage in support as quickly and effectively as they are able.
Communications and agility are key, so the BRC chair will need to be very closely connected to the board chair and CEO’s task team, other relevant board members and committee chairs too. These are times when a portfolio may find holding too many chair roles quite demanding, but having enough to cross-reference knowledge and experiences between them will be invaluable.
Beyond the short-term management of the crisis, a longer-term view needs to be taken – both as a future vision for reference as each short-term decision is taken, but also to be openly challenged as the future vision becomes supported or undermined as experience and evidence emerges.
Is your organisation’s board, independent directors, risk chair and risk committee membership notable for their contribution in a crisis? Perhaps for their obvious, yet sometimes subtle, influence on better outcomes rather than the noise made? How will the BRC need to change in response to this test? When we have the opportunity to do so…
Bryan Foss - Risk Coalition