Building Board–Management Dynamics to Withstand a Crisis: Addressing the Fault Lines
In brief: A corporate crisis has become a modern-day rite of passage for the board directors and senior executives of many companies. Everyone knows by now that crises are an ever-present threat that can strike any organization, no matter how apparently well run. Less discussed are the significant personal costs. Crises are emotional events that severely stress the relationships between the CEO, the senior-management team, and the board of directors. Crises can end careers. Such stresses can make the response to the crisis less effective and severely impair an organization’s ability to emerge strengthened from it and return to a path of profitable growth. Drawing on in-depth interviews with battle-tested board directors and senior executives who have experience serving on boards of or as senior executives at more than 80 US and UK institutions, this joint NACD-McKinsey paper explores the lived reality of such events as seen from the top, exposing lessons learned from both failures and successes. And we suggest some ways for boards and senior executives to equip themselves ahead of time to work together more effectively.
This resource can help your board:
- Anticipate and mitigate unhealthy and potential damaging board-management dynamics that may surface during a corporate crisis
- Deliver more meaningful board oversight of the company’s crisis preparedness
- Assess the quality of risk (and crisis) information that is reported to the board
Most relevant audiences: Lead directors, independent chairs, CEOs, audit committee members and General Counsel