Due to the Coronavirus (COVID-19) pandemic and subsequent market turmoil, directors have been forced to adapt to a changing governance environment. NACD has assembled, and will continue to update, resources to help guide directors through this unprecedented time.
COVID-19 Pulse Survey: NACD surveyed its membership the week of March 9 to measure directors' initial reactions to the COVID-19 crisis. Boards are confident in how management is dealing with the early stage of the crisis, with about half reviewing internal corporate communication strategies. However, at the moment, few boards have turned toward the longer-term implications of the crisis, with just 14% reviewing risk-transfer options management may have their disposal.
COVID-19 Emerging Board Governance Priorities: This piece offers six actions boards that can immediately take to ensure priorities are in line with the needs of company operations, including directing the audit committee to consider the financial reporting and disclosure implications of COVID-19 and rethinking CEO compensation in the wake of the crisis.
COVID-19 Board Checklist: These guidelines help assess management readiness to identify and mitigate the implications of COVID-19 and ensure business continuity. Boards can use this checklist to advance the dialogue with management to monitor the crisis response.
Implications for Boards: Appropriately navigating risk is fundamental to effective directorship. Each board member should be prepared to ask tough questions of management about their response and planning process for business operations and stakeholder management. Boards will also need to consider the longer-term implications of COVID-19 on the company's overall operations and strategy.
Key Questions Directors Should Ask:
NACD's Responding to the COVID-19 Crisis Resource Center provides directors tools and guides for navigating the myriad crises sparked by COVID-19. The NACD Blue Ribbon Commission on Adaptive Governance: Board Oversight of Disruptive Risk offers insight into how boards can adapt and manage risks during a rapidly changing business environment. NACD Nominating and Governance Committee Chair Advisory Council: Communicating in Times of Crisis can help directors craft effective messaging and communications during challenging times.