In this time of uncertainty, Corporate Board Member is reaching out to some of the most experienced public-company directors we know for their considered advice on what boards can, and should, be doing.
First up: Maggie Wilderotter, who recently appeared on the cover of Corporate Board Member.
Best known for leading troubled Frontier Communication’s journey from a regional player with $750 million in revenues to a $10 billion national broadband, voice and video powerhouse, Wilderotter is the consummate board member, serving on dozens of public, private and nonprofit boards. She is currently a director at Costco Wholesale, Hewlett Packard Enterprise, DocuSign, Juno Therapeutics and Lyft. Excerpts of our conversation, edited for length and clarity, follow.
Where to Focus
First and foremost, it’s important for all companies to really look at their liquidity. Do they have enough cash on hand? Do they have access to capital if they need it? Can they cut back or curtail on certain expenses till we kind of work through all this? Because as we know, the markets have lost 8,000 points, right?
It’s a hunker-down time, wrong or indifferent for every company—being able to weather the storm and to think about it as a 6 to 12-month window in a worst-case scenario, so we have some contingency plans. Companies must also look at what happens when we get to the other side. Are there opportunities as well as risks associated with this?
The other part, of course, is making sure we keep people safe, employees safe, our leadership safe because a lot of times the leadership says, “We’ll do this for the employees but not for ourselves.”
I think boards have to have a responsibility to also curtail what the CEO and the senior leaders do to make sure that they take the right precautions, whether that’s working at home or whether it’s closing down certain offices for a specific period of time.
It’s really important for the board to understand what management is doing—and for the board to also encourage management to take the right precautions for themselves.
Most of the companies that I’m affiliated with have now encouraged their employees to work at home and to figure out if there is certain manpower that has to be at the office, can we do that in shifts so you don’t have big crowds—just essential folks.
There are some businesses that can’t close. For example, the Costco warehouse business isn’t going to close down. So how do we keep people safe when they are in the facilities and they are around other people?
And then, to also make sure that we’re giving the right advice just on a daily basis. We’ve got parents that have kids that are at home now and schools are closed, how do you deal with that?
One example is the protocol for conference calls. A lot of folks are not used to doing large conference call groups. I had one yesterday with one of my boards and it was important to just remind people to say “what page are you on?” with a presentation. Let’s have some level of protocol of how people participate.
There’s also the issue that the services people use for conference calls are being overloaded. So, where do we get capacity in order to operate our businesses? I know a couple of companies are thinking about how to do that. How do we partner with the different groups to make sure we have some exclusive access where we need it?
The other thing is just the basics of staying home. Don’t come to the office if you’re sick. Even if it’s not coronavirus, just don’t come. Don’t affect other people’s immune systems. That’s the most important thing. So there’s the people issue. It’s protecting the company and making sure the company can withstand for a 6 to 12-month window.
Then: how do you communicate with your customers and your suppliers? I have a small business, just my own business. My husband and I did a contingency plan over the weekend last weekend to make sure that we have enough to support our workers even if we’re shutting down for several months. Just put that money aside. I know that there’s no federal program right now for giving people paid leave. But for a lot of businesses, we’re going to have to try to do that to get through a bad period of time.
I’ve talked to every one of my CEOs in the last two to three days because they’re all asking, “Is this overblown? Are we thinking about it the right way?”
CEOs don’t like ambiguous situations. They like to control and they like to figure out, “Well, what are we gonna do?” And so as a board member, it’s important to be an advisor, a level head. You’re not there in the business every day, but let them be able to talk through things because they need safe havens to do that to make the right decisions and to make good decisions.
Role of Committees
Something that I recommended to a couple of my boards is to do a conference call once a week with just the committee leaders and the chairman of the board. I chair DocuSign, for example. So, the head of comp is focused on what are we doing on the employee side, working with the CHROs and the CEOs. And the head of audit is working on the risk side with the CFOs and the liquidity issues, etc. And then you’ve got nom/gov working on “what are we doing from a governance perspective and communications perspective?” It’s a little SWAT team just to make sure everybody stays aligned.
For a number of our companies in tech, we get a lot of our supply from Asia to make equipment and to basically produce assets. And we’ve had a lot of discussions about [shareholder] guidance, and what kind of guidance do we give or not give at this point based upon really not knowing, but to communicate with our shareholders to let them know what we’re thinking, to keep them updated as well as we learn. I think we’re trying to be more transparent than you are typically in business-as-usual, as things change. So I do think that that’s one of the governance things that I’ve talked about with some of the non-gov leaders too.
Thoughtful planning is better than knee-jerk reactions. We should process information and actually apply that information to our specific situation in our business. It’s important for boards to lean in during this period of time with their CEOs, not lean back. And as we hear and learn things, to share that information and to stay in touch and to be more proactive communicating with each other. That’s important. Not to overreact, but to be a little bit more planful then sometimes anxiety drives you to be.