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The role of the board in responding to a crisis

Author(s): Andrew MacDougall, Lawrence E. Ritchie, John M. Valley

May 2020

EXPECTATIONS FOR MANAGEMENT AND BOARD

MANAGEMENT’S ROLE

  • Implement and adapt its preestablished crisis response plan
  • Identify risks and assess responsibility for developingmitigation strategies
  • Internal communications strategy – consistent and trust-evoking messaging from top to bottom
  • External communications strategy – message development, stakeholder identification
  • Tend to public reputation
  • Determine corrective actions
  • Execute the response plan

NEEDS OF THE BOARD

  • Frequent, timely and frank reporting
  • Quantification of impact/exposure
  • One point of contact between board and management
  • A clear statement of the questions
  • the Board needs to decide or
  • issues it needs to address
  • Clear understanding of stakeholder engagement strategy, and the role it, or any member, should be playing
  • Clear explanation of how short‑term responses address long-term needs

BOARD’S ROLE

  • Understand the situation, implications for the organization and management’s focus
  • Provide advice and counsel to management as sought
  • Be available and willing and able
  • to provide requested support to management
  • Understand and respect board and management roles
  • Make decisions with a view to longterm sustainability of the organization
  • Facilitate post-crisis review assessment and provide feedback to management

KEY ELEMENTS TO A CRISIS RESPONSE

  • Identified team, with allocated responsibilities and accountabilities
  • Approved internal communication framework
  • Assigned responsibility for external communications and stakeholder engagement
  • Contingency plans in case management is unable to assist
  • Systems to monitor developments and adjust the plan as needed
  • Engagement with regulators
  • Anticipation and management of additional fallout
  • Unobstructed up-the-ladder reporting

PREPARE FOR THE NEXT CRISIS

POST-CRISIS ASSESSMENT

  • What did we do right?
  • What could we have done better?
  • Solicit views:
    • internal stakeholders (directors, officers, managers, employees)
    • external stakeholders (customers, suppliers, regulators, etc.)

DEVELOP AND PROMULGATE INTERNAL AND EXTERNAL MESSAGING

  • How has the crisis affected the organization?
  • Where is the organization now?
  • Where are we going?

REASSESS AND IMPROVE CRISIS PLAN

  • Reassess enterprise risk management system’s ability to identify and mitigate new or evolving risks
  • Reassess plan’s ability to respond to the next crisis
  • Buttress defenses against the next crisis

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