CHICAGO, IL – DECEMBER 22: The Kansas City Chiefs offensive line line up at the line of scrimmage … [+]
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Here are a few top tips and recommendations to my fellow public and private company board colleagues in leading companies through this time of crisis:
1. Help shift the mindset of your CEO from visionary “growth” leader to wartime Churchillian leader to lead the company through the dark days and build ideally a 24-month cash runway.
2. Practice radical honesty and identify if your company’s product or services are an essential/need to have or a nice to have. This will inform your operational decisions on whether to cut or invest.
3. Be candid in looking at your company and see if you are a legacy company (low growth) or a high growth company. If you are a high growth company look at building up your balance sheet to go shopping to buy competitors peers adjacent companies to build a stronger moat.
4. If you are legacy/low growth public company (and in the bottom half of your peers) expect unsolicited inbounds from both M&A and activists. See if you have adequate protections in your bylaws…perhaps it’s time to look at the poison pill?
5. If you see your company will be a target, it may be better to proactively pick who you want to be acquired by, i.e. a white knight than simply being on defense and responding to inbounds.
6. Don’t forget your corporate hygiene! Everyone is working in a virtual environment at home and using their own devices. This would be a terrible time to have a cyber breach. Perhaps it’s wise to prioritize cyber retraining.
7. Carefully monitor your shareholder base to see if activists are building a position.
8. Consider holding a virtual AGM.
9. Given that most stock prices have had a deep dip, expect potential lawsuits and keep meticulous minutes.
10. Lastly, review your succession planning. The proverbial “name in the drawer” may be someone who you have identified for business as usual; in this environment you need a crisis management wartime leader with high EQ.
This is an opportunity to engage with your top 15/20 shareholders. Although you may not be able to give guidance, you can certainly share how the business is functioning and some of the macro environment trends that are impacting the business.
Being engaged although conservative and realistic will be appreciated vs. hiding and kicking the can down the road. You can still share how your company’s vision has unique value for the future.