Bill Farrell, Managing Partner Taiwan and South Korea, talks learnings and action needed for a successful board and company in today's world.
It was a little over a year ago that I flew from my re-established base in Taipei to Frankfurt and then Boston. This was just as the spread of the COVID-19 pandemic was reaching Europe and the US. In Frankfurt I attended Boyden’s last (so far) in-person Board of Directors meeting, ending my 8-year stint on the board. Among the topics discussed was how we would handle our 2020 shareholders/global conference scheduled for May 2020. Cancelation was seen as an unlikely worst-case scenario. Not only was our 2020 global conference an online event, our 2021 conference will be another virtual event.
I then travelled to Boston to visit my daughter who was in the last 2 months of her junior year in university. The day after I landed both MIT and Harvard University announced their campuses would be closed for the foreseeable future. That was just the beginning. Just like our board of directors, my wife and I were not prepared for the rapid spread of COVID-19. We scrambled to get airline tickets for our daughter to return home. She spent the subsequent 12 months attending classes online in Taipei – often from 12midnight to 4AM.
Yes, as has been well-documented, the COVID-19 pandemic has turned our worlds upside down. It has exposed weaknesses in healthcare systems, emergency planning, and supply chains. We have also learned that swift and decisive action brought better results. New Zealand, Taiwan, and Singapore are good examples. We have also seen that learning from mistakes and taking corrective measures also have a positive impact. Witness the good news in the UK and even the US regarding vaccine rollout and falling death rates. We have also seen that vigilance is a must. The devastating news from India is a prime example of what a lack of vigilance can bring. Decisive action, learning from past errors, and vigilance are all hallmarks of leadership. These are just some of lessons from COVID-19 that can and should be applied to corporate leadership.
Like any crisis this pandemic has put pressure on leadership. In the corporate world this means pressure on Boards of Directors. The ability to take decisive action, learn from and correct past errors, and to remain vigilant, all require strong leadership and proper corporate governance. In my basic board training sessions, I focus on the fundamentals of good governance. Once a solid foundation is established, a strong and healthy organization able to withstand myriad challenges can be established. This all starts with the role of the board. The primary functions of the board are as follows:
- Set the mission and vision of the company or organization
- Choose the Chief Executive Officer
- Support and evaluate the Chief Executive Officer
- Ensure an effective planning process
- Monitor and strength products and services offered – ensuring aligned with mission and goals
- Ensure financial viability of the organization, including providing appropriate financial oversight
- Build a strong and competent board
- Ensure the legal and ethical integrity of the board
What is NOT included in this list is as important as what is included. The Board is not responsible for the management of the company. The Board hires a CEO to lead the management and operational aspects of the company. The separation of the work of the board and the work of the management team is an essential aspect of good corporate governance. And in my work, this is where young companies, family-owned businesses, and some not-for-profit organizations stumble.
Over the coming weeks, I will post an article that looks at a particular corporate governance issue. The focus will be on organizations that may be struggling to get it right as they grow and face today’s multitude of challenges.
