By Pankaj Vasani
Virtual Board Meetings (VBMs) have come into being in an era of disorder caused by the Covid-19 pandemic. They bring with them the need for behavioural changes and increased engagement. They are also upending the long-held views on performance, effectiveness of meetings, and governance issues.
Boards across sectors are meeting very often – some even on an everyday basis. For sure, they are not restricted to just quarterly meetings and monthly update calls. Members cannot afford to miss any beat.
Given the fluid and ambiguous situation, the requirement for thought leadership has increased immensely. And therefore, the numbers of (informal) interactions between board and management have surged. It’s all hands on deck. No boards of winning companies can afford to have ideologues in this crisis.
The points of discussion too have multiplied manifold. Ranging from business continuity, financial health, new dimensions of business like product planning decisions, translating breakthrough ideas into an action plan, implications of government announcements… to approving budgets, plant restart, senior-level appointments, lay-offs, salary cuts, promotions, bonuses, physical safety and mental health of the workforce, etc.
Also, now that the world is on a standstill axis, routine decisions relating to borrowing, lending, investing of funds, issue of securities, etc. need even more surgical discussion and implementation.
Directors need to deal with a virtual meeting as earnestly as a physical board meeting. They need to organize, do the reading, come prepared to dialogue and be extra engaged and focused.
Simultaneously, a heavy burden has been cast upon the Chair to keep the members optimally focused, in effect, and productive over video. Shorn of physical presence, the silent members can go on unchallenged. Also, it may be difficult to shepherd discussion, ensuring everyone’s involvement, especially with larger boards.
There are many advantages to VBMs. Ease of organising and coordinating these meetings is one. They are much better attended for another. They lead to flexibility and faster decision making, saving time, cost and help improve productivity (more structured & lesser hiatus, chitchat, and drinks/dinner session). It leads to a more focused and meaningful engagement. It also makes board participation more appealing to a potential candidate.
Many boards are anxious about the security factor and confidentiality for some close and sensitive discussions, which need to be kept under wraps. Also, there is an inherent and pre-conceived notion that physical meetings are superior to virtual ones - as it is difficult to pick up non-verbal cues in visual interactions; supposedly leading to skirmishes or misinterpretations.
Members in remote locations may also be more susceptible to interruptions. Last but not the least, many boards also want to keep track of the times when the member joins/leaves a meeting, and how long they stay in the live session, etc.
There are some brilliant workshops, document sharing, video conferencing, and planning tools available in the market which can help provide a comprehensive ecosystem to securely and proficiently set up and run meetings. With a fully contained platform and the right technology partner, the boards can continue to succeed in their new-fangled environment. Also setting up some good housekeeping practices and beseeching feedback from all members about the meeting process can provide constructive criticism to help improve performance, evolve the board/governance process, besides making members feel more at ease with the changeover.
The preparations now need to be brought to a whole new level. Board materials and presentations need to be made crisper and be distributed (maybe physically too) ahead of time – to allow the members to ransack their brainbox for more productive conversations.
Members need to be aligned in advance in support of the new format. Staff need to practice slide decks and presentations in advance. As appropriate, they can undergo training to this effect.
Agenda needs to be clear, succinct, and well laid out - to maintain focus, engagement, and create a structured flow of events. It will also be handy to create action-items or minutes. The person taking the notes should be knowledgeable and be accountable into the meetings, to create immaculate minutes.
Everyone needs to become familiar with the relevant technology. Test the system ahead of time to ensure it works as needed. Establish backup plans in the event of technology issues. Companies may need to invest in the tech, especially in directors’ homes. Consider using reliable communication and conferencing tools.
Lack of physical presence does not mean that the board slacks off on its governance duties. A corporate is judged by its governance standards, in whichever sector it may operate.
Technology is helpful, but sometimes traditional and anchored methods of ‘taking it offline’ and ‘reasoning it out’ can be more effective in ensuring governance. The interest of the organisation and implementing avant-garde governance standards must be scrupulous. Also, the law is supreme. In case of doubt, there’s value in having the General Counsel or external advisor’s view to hand.
(The author is a seasoned business leader and finance expert with over two decades of experience in senior executive roles and as a board & audit committee member. Over the years, he has donned various hats – Group CFO, Finance Head, CEO, Tax/Legal/Compliance Head, and member of Board of Directors. He has held leadership roles with Vodafone, Publicis, Coca-Cola, & Subros. By education, he’s a Chartered Accountant (England & Wales), Certified Public Accountant (Australia), Chartered Accountant (India) & Lawyer (Delhi University)Follow our coverage of the coronavirus crisis here