We are all making new policies around workplace safety, due to the pandemic. How close we can be to each other, how often we clean our workplaces, to name just two. We do need to document these new polices and we need to show how we are training our employees to follow the new rules. There are large fines for noncompliance with provincial orders.
The board should make sure that management can show that the proper policies were in place and that employees were informed. I have always said that the two policies where an annual confirmation should be obtained were conflict of interest and confidentiality. Now I am adding another one. Why don’t we get a written confirmation from our employees that they are aware of our new safety policies and they promise to follow them.
Every board has a fiduciary duty to do what is best for the organization. Boards are facing many decisions that have to be made with incomplete information. No one knows when this pandemic will be over. That old saying “your guess is as good as mine” has never been as accurate as it is these days. How does a board manage risk in the face of so much uncertainty? How do you plan?
One technique is to figure out how long the organization can continue to exist if there is no more money coming through the door. Ask management to calculate the monthly fixed costs – the costs that are continuing even without activity and to look at the amount of money in the bank. A rough calculation will tell you how long until the money runs out and the organization is out of business. If you have a year or more before the money runs out then the issue is far less severe than if the answer is that you will be out of money in 3 months.
Can you prolong operations by reducing the fixed costs? Are we taking full advantage of the government programs that are available, the loans and the wage subsidies? How much longer can we operate if we qualify for a wage subsidy? What if we ask our lenders to forgo payments for a year?
There are many interesting questions that will be explored at board meetings. We may be facing a stressful time but you can’t say that it isn’t interesting.
I am occasionally asked how big a board should be. This of course is a trick question. A smart ass answer would be, ‘big enough to reflect a diversity of opinion, but small enough to keep the meetings to a reasonable length.’
Diversity of thought often follows diversity of people. If everyone on the board is an accountant, then in addition to having boring meetings, you are going to be spending time talking about financial stuff. Accountants see the world in numbers. If you have a board composed entirely of graphic designers then I bet the logo for the organization is in good shape. Now, who else can I offend with a stereotype?
Hopefully you see the point I am trying to make, we need to have different people on the board and we need to have a big enough board that we can get this diversity. We need financial people and legal people and human resources people and technical people, etc. However, a board of 15 or more people can be unwieldy unless the board chair is particularly skilled at keeping the conversation moving. Just the time it takes 15 people to say hello to each other can make a meeting feel long.
The board should consider how many members they need to get the work done in an efficient manner. We are looking for the Goldilocks of board size, not too big and not too small, we want it to be just right.