Rethinking The Way Boards Plan For Disaster Management

The Covid-19 pandemic exposed how unprepared the business community was for disasters. In an article for the Harvard Business Review, Seymour Burchman and Blair Jones argue that the pandemic, which disrupted the global supply of essential goods and services, was predictable rather than being a random "black swan" event. We have had pandemics in the past, and we know that there will be more pandemics in the future. The same is true for strategic disruptions, which can be caused by natural disasters, terrorism, cyber-attacks and more. Boards must put in place the necessary structures to prepare for these events if they want their companies to survive when disaster strikes. It's time to rethink the way boards plan for disaster management.

Boards must focus on resilience

Resilience is the ability of an organisation to face, absorb and recover from disasters. Resilience is not about being fully prepared for a disaster before it happens. That is often impossible to achieve. It is about knowing how to prepare and protect the organisation in the face of known threats and having a proven plan for recovery when disaster strikes. The ability to bounce back quickly from disruptions means that an organisation will not only survive but will retain customers and its reputation.

Boards must realise that resilience-building is an ongoing process and not just a defensive strategy. It should involve a systemic approach, with a combination of prevention and mitigation measures designed for the specific threats that the organisation faces. This requires greater cooperation between the board, management, and other stakeholders.

Look beyond immediate threats

Board members need to look beyond the immediate threats that their companies face. It's not enough to be prepared for another Superstorm Sandy or Hurricane Katrina. They also must acknowledge that looming pandemics, cyber-attacks, and other disasters are waiting in the wings, with potential economic consequences just as significant. Board members must understand how business works today to prepare for a future where disruptions are more common.

Build a new framework of trust with C suite executives 

Boards need to build a new framework of trust with C-suite executives so they can collaborate effectively when disaster hits. CEOs and other top leaders must be open with board members about the company's vulnerabilities. They also must give directors a voice in choosing their business partners and vendors, which will help boards understand how to prioritise the necessary actions when disaster strikes.

Prioritise people over numbers 

In his best-selling book "Leaders Eat Last," author Simon Sinek recounts stories of companies that survived major disruptions such as the global financial crisis because they had leaders that put their employees first.

"To treat people like family and not as mere employees. To sacrifice the numbers to save the people and not sacrifice the people to save the numbers," Sinek wrote.

"Leaders of organisations who create a working environment better suited for how we are designed do not sacrifice excellence or performance simply because they put people first. Quite the contrary. These organisations are among the most stable, innovative and high-performing companies in their industries," he added.