You can?t solve the crisis, but you do have a unique part to play. Even in the army during wartime, 90% of people are not on the front line fighting. That doesn?t make them irrelevant.

Right now many businesses are struggling, some fighting for survival. The executive team are fully occupied with operational issues, hunting for revenue, having tough conversations about reducing costs. How can a non-executive director add value? You probably can?t do much to generate revenue. Lecturing the executive team about focus, or cost management, or anything in fact, only irritates people who are already stressed. But you can make a difference.

Take a longer view

In a crisis the focus is short term. Aside from a few sectors with a naturally long term view, like infrastructure, the short term focus can become all-consuming. While the execs operate day to day and week to week, the non-execs can help them look up from today?s urgent issues. The global economic crisis caused by Covid-19 is so volatile that maybe a three month, or perhaps six month, horizon is enough. Everyone?s looking at cashflow, of course. Are they taking enough action now, not just for the next month but for the next year? What might they look back on in the autumn and wish they?d thought to do now? Paying out bonuses is an obvious one. Make sure they?re also thinking about how today?s decisions impact the people and the business in three, six, nine months. Is the pain being shared equitably? Will others in the business see it that way? It?s safest to assume nothing stays a secret, so can they stand by today?s judgement calls, if they become known to all employees?

Provide a counter view

An overly-optimistic CEO needs someone else to posit more pessimistic scenarios. You?ll both probably already know you play this complementary role. Make it explicit: you?re not questioning their expertise or judgement, and they?re closer to the market reality. Instead, you?re exploring other possibilities, in case things change. The business needs to be prepared. Many NEDs have contact with other businesses and sectors, providing a wider view of market activity.

Equally, be the sunshine when their outlook is gloomy. It?s tough on the front line. Market uncertainty cuts both ways, so support cautious action if that?s what?s called for, but explore upbeat options too. Agree what the early indicators might be, for positive or negative action. Check on them regularly.

Notice their feelings

It?s understandable that people are stressed. But stress doesn?t generally lead to better decisions. If the relationship works, have separate one-to-one conversations that focus on the person not the business. It?s not about problem-solving ? you can?t solve people?s emotions. Acknowledge how different it is for you, the armchair general, compared to them, having difficult conversations and perhaps sleepless nights. Making the effort to initiate these conversations should make the emotional support more valuable than a few platitudes delivered on a board call.

Stick to your principles

All directors have the same fiduciary responsibilities, under UK law. This is not a time to back off, even though it may feel like non-execs should go easy on the executive team. They?re busy, but you can?t just leave them to get on with it. NEDs have to be careful to ensure that supporting them through a crisis doesn?t mean yielding all control. Testing their decisions against established principles for the business, as well as your own, will lead to better outcomes.

Thought leadership | April 2020