BOD Chair

Prof.Dr.Aung Tun Thet

7/31/2020

Based on “The Role of the Board Chair During a Crisis”, by

Achim Schmitt, Gilbert Probst, and Michael Tushman, MIT
1 SMR,
 • Crisis breed uncertainty
• Create emotionally draining conditions for
organizations
• Require fast decision-making with limited
information
• CEO transforms into Chief Crisis Officer
• Chairperson increasingly unsure how to
strike balance

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CHAIRPERSON
• Know success depends on how they ‘walk the
tightrope’
• Too involved or too remote in company’s strategy
execution
• Board’s role to monitor crisis response of senior
executives crucial and in interests of all stakeholders
• Risks creating response delays and bottlenecks
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CHAIRPERSON

• Know success depends on how they ‘walk the

tightrope’
• Too involved or too remote in company’s strategy
execution
• Board’s role to monitor crisis response of senior
executives crucial and in interests of all stakeholders
• Risks creating response delays and bottlenecks
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CHAIRPERSON

• Preserve future strategic options for sustainable

growth
• Difficult to implement when organization’s short-
term survival on the line

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CHAIRPERSON

• Frictions increase if chairperson and CEO have

conflicting views on crisis response measures
• Divert attention of both parties to preserving image
and reputation in face of media and key stakeholders
— “damned if you do, damned if you don’t” situation

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INTERACTIONS

• Between chairperson and CEO

• Establish decision rules, guidelines, expectations,
agendas, and communication strategies
• Essential and underestimated success factor for
leading organizations through crisis

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INTERACTIONS

• Complementary roles
• Strategic alignment
• Chemistry

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CHAIRPERSON AND CEO

• BOD’s job description “control” and “advice”

• Board members ensure senior executives act in
stakeholders’ interests
• Contribute to corporate decision-making via
strategic guidance and counseling to executive
teams
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CHAIRPERSON AND CEO

• Chair bridge between BOD and senior executive

team
• Relationship critical for success
• Regular interactions
• Keep all means of communication open

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CHAIRPERSON AND CEO

• Fundamental alignment
• Communicating across multiple boundaries
• Keeping people informed of changing situations and
policies

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CHAIRPERSON AND CEO

• Answer extraordinary range of personal and

professional questions
• Keep people focused, healthy, engaged, resilient,
and optimistic

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CHAIRPERSON AND CEO

• Collaborate closely - “catalyst for reinforcing the

firm’s purpose and strategic intent”
• Ensure consistency of company’s overall strategic
direction
• Committed toward strategic direction despite need
for short-term focus and actions
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CHAIRPERSONS

• Maintain roles of control and advice

• Align with leadership

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1. SAFEGUARD IDENTITY AND
MISSION
• Major risk of reacting with shortsighted, routine-
based actions rather than creating overall strategic
recovery plan
• CEOs pressured to take immediate action and
communicate response quickly

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1. SAFEGUARD IDENTITY AND
MISSION
• Divestments, product eliminations, layoffs, and
cost cutting
• Ease pressure for immediate performance
improvements

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1. SAFEGUARD IDENTITY AND
MISSION
• Risk carving up organization’s heart and soul
• Fail to recognize critical skills, capabilities,
experience, and culture crucial to organization’s
long-term recovery
• Emphasize organization’s purpose, identity, and
culture
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1. SAFEGUARD IDENTITY AND
MISSION
• Strong commitment to organization’s identity
functions as overarching crisis vision
• Guide senior executives when formulating and
implementing crisis response strategies

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1. SAFEGUARD IDENTITY AND
MISSION
• Avoid confusion
• Align guiding coalition towards aspirational goal
• Motivate employees
• Ensure stakeholders’ support

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1. SAFEGUARD IDENTITY AND
MISSION
• Challenging prioritization in harmony with firm’s
purpose and strategic intent
• Align crisis communications with organization’s
purpose
• Chair CEO channel organization’s energy and
passion toward most fundamental goal: preserve
organization’s raison d’être
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1. SAFEGUARD IDENTITY AND
MISSION
• Maintain focus on purpose
• Leadership team persevere despite stress and
uncertainty
• Resilience help leaders keep clear head but also
allows company to thrive

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1. SAFEGUARD IDENTITY AND
MISSION
• Deal with negative emotions and anxiety
• Create safe space

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1. SAFEGUARD IDENTITY AND
MISSION
• Deal with negative emotions and anxiety
• Create safe space

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2. RESOLVING ANXIETY

• Chairpersons actively address emotional and

psychological impact on CEOs
• Should not increase stress and discomfort
• Approachable, express sympathy, and apply team-
oriented approach

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2. RESOLVING ANXIETY

• Display involvement, understanding, care, and

empathy — toward CEO in particular
• Provide psychological support
• Avoid impaired decision-making driven by negative
emotions, uncertainty, and fear

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2. RESOLVING ANXIETY

• Foster positive energy functions as catalyst

• Help CEOs to remain rational instead of emotional
• Steer decision-making toward rational facts rather
than emotional disagreements

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3. CREATING SAFE SPACE

• Value trusting relationship with senior executives

and BOD members
• Chairperson function as sounding board for CEO
• Characterized by openness and honesty

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3. CREATING SAFE SPACE

• Maintain close relationship with CEO

• Timely exchanges, feedback, and alignment on
strategic actions
• Increase consensus and decision speed

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3. CREATING SAFE SPACE

• Not be forced upon CEOs

• Not micromanagement
• CEOs encouraged to make independent decisions
and act at discretion

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3. CREATING SAFE SPACE

• Trust create foundation for CEOs to actively seek

feedback and advice
• Goes both ways

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3. CREATING SAFE SPACE

• Violating trust create vicious cycle of blame and

mistrust
• Cause serious damage to organization’s chance for
recovery
• Detrimental to both CEO and Chair

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3. CREATING SAFE SPACE

• Trusting relationship built on mutual support and

interest
• “We are both in the same boat” mentality
• Bring chairperson closer to CEO
• United leadership
• Chairs and CEOs align individual interests
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CHAIRPERSON MATTERS

• Companies ensure alignment and mutual support

from BOD, Chair, and CEO
• BOD and Chair disciplined, stick to roles, stay
detached from operations, and concentrate on being
sparring partner for CEO

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CHAIRPERSON

• Don’t interfere or micromanage

• Help CEOs navigate challenges
• Provide consistent reminders of organization’s
identity and mission

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