The ongoing fallout from the pandemic associated with the novel coronavirus (COVID-19) continues to challenge companies, boards and management teams across all aspects of their business. In trying times like these, senior management team members are meeting regularly to discuss the impact of the virus on their business operations and formulate contingency plans that must be put into place to manage through this difficult environment.
Sometimes, management teams can be so focused on managing through a crisis that they fail to implement the protocols they are adopting for their broader associate base amongst themselves. For instance, many companies have recently implemented social distancing protocols among their employees including, remote working arrangements, limiting large meetings or non-essential face-to-face meetings. Meanwhile, groups of senior managers are meeting in-person in close contact with one another.
Certainly, in-person meetings are typically a more effective way to quickly and decisively tackle difficult circumstances, but senior-level management team members shouldn’t lose sight of the need to practice safe social distancing as the country works together to “flatten the curve.” Have telephone or video conferences when possible, and if in-person meetings are necessary, keep meetings as short as possible, choose a larger room where people can sit a safe distance from one another, and ask members that don’t feel well to join the meeting remotely.
While senior leadership team members naturally want to be out front, visibly leading the charge and boosting morale in times like these, having one or more senior leaders working remotely, or taking turns doing so, may be better for the organization as doing so can help to prevent the potential spread of the virus among all the key leaders within a company.
The ongoing pandemic has further highlighted the need for thoughtful emergency succession planning. Most companies have emergency succession plans in place should one member of a senior management team be incapacitated but should two or more members be effected those plans may fall apart. Again, in this situation, keeping senior leaders a safe distance from one another is a best practice, whether that be by limiting in-person interaction or having some members of the senior management teamwork from home.
As we approach the end of the fiscal quarter, ensuring that finance and accounting groups will be able to close the books and promptly and accurately report the financial results of the company will be challenged, particularly if senior leaders in those groups are affected by the virus. Safe social distancing practices can again help in this area. Having a portion of the group work from home while others remain in the office may help to ensure that these important tasks are completed on time. CFOs, controllers, chief accounting officers and others should all work collaboratively and seek to keep a safe distance from one another whenever possible. And don’t forget to talk to your audit staffs about their social distancing practices and contingency plans for aiding with the quarterly close process.
Finally, companies should give thought to how to best keep boards of directors informed about the practices a company is implementing to address the impact of the virus on their business. Boards are responsible for oversight, not day-to-day management, but regular communication with a board, whether by in-person meetings, email, telephone conference or video conference, can help shape management’s response to challenging times like these. If in-person meetings are held, again be thoughtful about creating as safe an environment as possible for these meetings. Keep meetings as short as possible, allow for adequate distance between participants, and encourage those members that don’t feel well to join the meeting remotely.
We expect that there will be a significant increase in remote board and committee meetings in lieu of in-person meetings as we navigate our way through this quickly changing environment. With many public companies considering a virtual-only or hybrid annual meeting we know many companies are considering whether to hold their board meeting that accompanies their annual meeting in-person or remotely. If you have questions about best practices for senior management during the COVID-19 pandemic, please contact the authors.
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Public and private companies of all sizes across a variety of industries turn to Bass, Berry & Sims for counsel on a wide range of corporate matters, including mergers, acquisitions and dispositions; capital markets transactions; executive compensation issues; corporate governance; and shareholder activism. We serve as primary corporate and securities counsel to more than 35 public companies and have counseled on 150 deals ranging in size from $20 million to more than $15 billion over the past two years. Click here to learn more about the Corporate & Securities Practice at Bass, Berry & Sims.