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Perspectives

Examining the board’s role before crisis strikes

A Boston Business Journal series

​Ensuring your board has a ready response is crucial to surviving any business crisis.

Examining the board’s role before crisis strikes

An employer’s perspective, as shared by William K. Bacic, New England managing partner, Deloitte LLP

As threats continue to mount against organizations, more boards are taking on a more proactive approach to crisis management. In doing this, they are helping to add significant value and stability to the organizations they oversee. Naturally, this is a very positive development for both boards and the businesses they serve.

Recent cases illustrate the role management sometimes may play in either causing, or not properly anticipating, a threat that could lead to a crisis event. For example,

Research conducted by the Institute for Crisis Management shows that companies often are the cause and effect of major issues they come across, in 2014, a majority of crises were derived from issues that organizations controlled or oversaw.

Thought leadership suggests boards should hold management accountable for the types of behaviors that can lead to damaging events. In doing so, they are taking steps to ensure the organization goes beyond simply having a plan in place, and sees that top executives are trained to respond to a crisis, and consider crisis simulations to find gaps in the plan. Above all, boards should be confident that management has a crisis playbook that outlines responses for a range of events.

Of course, not all crises can be anticipated, or avoided, for that matter. But management should have a heightened awareness to issues that could potentially lead to a crisis, and have access to tools that can monitor and track them. For instance, risk sensing is one of the many valuable techniques management can use to anticipate and prepare for potential incidents.

As boards turn to management to assess their crisis preparedness, they should consider asking the following questions:
  • Do we have a crisis management plan in place?
  • Has the team been adequately trained?
  • Are the board’s roles and responsibilities articulated in the plan?

By asking these important questions, directors can enhance their management oversight roles and help their organizations to employ the techniques necessary to respond to, and mitigate, future crises.

To read more on the importance of the board’s role in crisis management, I encourage you to read the article by Deb DeHaas and Ashish Patwardhan.

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