Deckchairs and Governance

On the Beach
As the Summer draws to a close, many have been able to take holidays this year, and while not all Board Directors will be confined to school holidays, often there are no Board Meetings in August which provides a good opportunity to get away.  The same holds true for Government Ministers with Parliament closed.

In 2020, holiday was virtually impossible in many countries, and now that we are back into the holiday season we are already seeing leaders being called out for not being in the office or sufficiently contactable when critical decisions need to be made, most notably over the fall of Kabul.

In this Overture we explore the importance of taking a break and the risks of being out of touch – a theme of relevance for any business leader and in particular the CEO but also the Chair.

Holiday Interrupted
This issue is not a new phenomenon.  Certainly in the UK, holidays over the Christmas period have coincided with flooding which is a critical priority for businesses in the region and government agencies, including their Boards, and being outside the country in the hour of need has given rise to criticism and led to Chair resignations.

Obviously, business leaders and Board Members need holidays too. There is significant research evidencing the benefits of recharging the batteries. In addition to the obvious health benefits there are specific requirements for executive staff in Financial Services, for example, to take two weeks consecutively to allow fraudulent activity to surface. You may argue that Non-Executive Directors (NED) are not so in need of a break, as they are not in full time employment, but the NED workload has increased dramatically in particular over the past year and many NEDs find that with more than one company claiming their time, the workflow can feel continuous.

Do Not Disturb
With increased focus on mental health, companies are now careful to allow employees uninterrupted peace and down time when on holiday. But what of business leaders? Should the ‘do not disturb’ sign be put up in the same way?

The majority of CEOs and Chairs will seek downtime. Some will put up a clear ‘do not disturb’ sign, while others with the benefits of technology will remain much more closely in touch. (Some CEOs in particular are legendary for contacting hapless employees, regardless of time zone, at all times of the day and night!)

The reality is all Chairs and CEOs need to be confident (a) of the calibre of the team running the company in their absence and (b) that critical issues will be escalated.

This was one of the themes touched upon in our recent  ‘Chair as Chief Reputation Officer’ webinar, in which Sir Peter Gershon, former Chair, National Grid Group, Sir Ian Davis, Chair, Rolls-Royce, and Ruth Cairnie, Chair, Babcock International explored with Fidelio how Chairs and Boards think pre-emptively about reputational risk and crisis. This included developing a healthy culture and also ensuring effective stakeholder engagement and communications capability within the organisation.

The Judgement Muscle
But crises do happen. It’s a feature of business and political life. As such Fidelio will review at our forthcoming “A Seat at the Table” Programme how Chairs can develop the “judgement muscle”, so they are able to discern the gravity of the situation and when their engagement is needed. Yes, some of this is nature not nurture but much is experience, the so-called scars on the back. Through case studies and practical examples, “A Seat at the Table” participants will have the opportunity to work through scenarios, including how to respond to crisis during a holiday thinking, through dimensions such as governance implications and stakeholder expectations.

There is no template. This is the skill of being an effective Chair – having the judgement to navigate the situation, gathering the information and interpreting what may be a weak signal. This also applies when on holiday.

To learn more about Fidelio’s Board Development programmes, please contact Amy at awright@fideliopartners.com.

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