Almost every firm operating at the moment will be grappling with the challenge of business continuity.
The board – ultimately responsible for the strategy and operations of the organisation – is at the centre of this need to maintain some element of ‘business as usual’.
An article in Global Banking and Finance this week talked about the concept of ‘remote resilience’ when looking at how some firms have adapted to the current situation. Although the article is about asset management in particular, it raises interesting points that are equally relevant across sectors.
What is ‘remote resilience’?
Some sectors are obviously more to move to remote working more easily than others. In some sectors, operating remotely is impossible for the majority – although some back-office workers in many industries are adapting to working from home.
Remote resilience is the ability of firms to adapt to this – the systems, processes and cultures needed to adopt a new way of working.
Regulated financial services firms, such as asset managers, as the article points out, ‘will have stress-tested their businesses to withstand plausible severe scenarios as part of broader regulatory requirements in place across the financial services sector’.
Even the most extreme stress-testing exercises are unlikely to have modelled the unprecedented current crisis, though. Companies have had to enable remote working for entire workforces in a matter of days. (And for financial firms, all of this has had to happen while dealing with the fallout from one of the most volatile investment markets in living memory).
What does this mean for boards?
The board needs to review and approve business continuity plans – but generally, this is done as an academic exercise. There has been little expectation that the most radical of these plans would ever have to be implemented.
Yet, as the article says, business continuity protocols ‘have gone from testing a plan on a page to implementation at breakneck speeds’.
Boards of directors have ultimate responsibility for these plans, and need to oversee their implementation.
Responding to a spectrum of challenges
Whether you are a larger or smaller company will have dictated, in part, the challenges you’ve faced as you have moved to remote working.
Larger corporates may have been better placed to instigate remote operations; they may have had an element of this in place already, using systems and online solutions to enable colleagues across offices and countries to work together. Smaller businesses may have had fewer or less robust online solutions to draw on and expand in their time of need.
Operating in the new normal
So, what steps should boards be taking to make their firm resilient now, and as we continue to operate in a crisis situation?
- Lead from the front
Our last blog explored why boards that have embraced digital working currently have an advantage, being able not only to move to remote working more easily themselves but to encourage their organisations to do the same.
Read more about why digital boards currently have the best chance of success.
- Focus on key business functions
Prioritise where you need to focus. Our recent blog on the practical steps businesses can take to keep operating in a pandemic sets out some of the areas where boards and their firms may want to concentrate.
- Remember the need to meet regulatory requirements
The GBF article notes that ‘we may inevitably see some relaxation on processes and regulation demands, but firms must continue to prioritise their monitoring and controls’. Our recent blog outlines some of the corporate reporting rules that have been relaxed during the pandemic.
But some rules are non-negotiable; the board needs to think about practical alternatives for some of the regulatory approaches they may have taken for granted, such as call recording. As the article says, although there may be flexibility at the moment, ‘firms should ensure that the decisions and actions of today stand up to scrutiny at a future date’.
- Don’t forget existing challenges
Responding to the challenge of the pandemic may be priority number one currently, but other business considerations haven’t disappeared. Some have been exacerbated as employees work remotely – for instance, the potential for fraud and cyber attacks, and the need to comply with data protection rules.
- People management is key
As the article says, ‘People management will also be critical through this period’. Potential mental health considerations, for instance, as well as physical health challenges and the impact of illness, whether Covid-19 or otherwise.
Alongside the human element of this, key person considerations also come into play: could your firm continue to operate effectively if some of your core team were absent? This might apply not just to people within your firm, but to third-party providers you work with too.
- Keep teams connected
As the article points out, ‘there are a wealth of collaboration tools available to help keep teams connected and joined up’.
This might mean giving your Sales, Marketing and Compliance teams access to collaborative project management and reviewing tools for marketing collateral, or enabling the board itself to work better remotely via online board portals for meeting papers. Whatever solutions you adopt, collaborative tools both enable efficient operations and help to maintain a sense of community among teams working in isolation.
- Learn lessons for the future
During this unprecedented time, boards should take the opportunity to reflect on the ways they have adapted. Are there lessons to learn for the future, in terms of things that have worked well and might be extended after lockdown? Are there lessons learned and things that need improving to increase corporate robustness in case we face a similar situation in future?
Embrace digitalisation on the board to improve resilience
As we mentioned above, boards that have already taken a lead on digital transformation are likely to be best-placed to weather the current storm.
One of the easiest ways for a board to enjoy the benefits of a digital approach is by making use of a board portal. If you want to read more about portals and the advantages they can bring to boards, you can download a copy of our Board Portal FAQs. They are free, and you can get a copy from our resource library.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.