RATIONAL LEADERSHIP ESSENTIAL FOR BOARDS

BOARDS must offer rational leadership that builds on their existing strategy amid the coronavirus crisis, according to Parmi Natesan, the chief executive of the Institute of Directors in South Africa. She said the Covid-19 emergency had prompted much media coverage, panic in some quarters and severe market falls. At a time like this, it was vital that organisations act rationally, Natesan said. “Boards are responsible for developing strategy and ensuring an organisation is sustainable. An unfolding global emergency like this is not the time to formulate a new strategy. Like all crises, this one will pass and a steady hand is what is needed,” she said. “Boards must offer rational leadership that builds on their existing strategy to steer the organisation through these choppy waters.” Natesan advised boards to look at the potential impact on the organisation’s ability to function. “While the Covid-19 emergency may not have an immediate impact on the organisation, it is important to look at the possible medium and long-term effects. Among these could be the impacts on the organisation’s extended supply chain and thus its ability to achieve its goals.” These impacts could be difficulty in accessing products or components, or employee absenteeism, she said. Boards should look at what their core products or services were and what the critical dependencies were. She said the board should consider the impact on the six capitals – Human, Financial, Social and Relationship, Manufactured, Intellectual and Natural – that every organisation depends on. Boards should assess the business continuity plan. “Once the potential impact of the emergency on the organisation’s ability to function have been established, the board should assess whether the business continuity plan is able to mitigate the risks sufficiently, or whether it needs to be adjusted.” Furthermore, companies should update the risk register. “Risks do materialise, and boards should resist the opportunity to make snap decisions based on saturation and often exaggerated media coverage. This is the time to make sure that the existing strategies are fit for purpose, and then to act in line with them,” Natesan said. | Staff Reporter