ADOPTING A HYBRID MODEL

Businesses must weigh the options – Ralph Ward and Dr. Muneer Muhamed

As businesses begin limping back to some cautious normalcy following the pandemic and economic crisis, many executives have restarted some of their old practices. These include the resumption of physical meetings by boards of directors even though the virtual alternative was more time and cost efficient.

We have learnt many lessons on how much boards can do remotely – far more than we thought possible three years ago, in fact. But there is still a human need to connect for unstructured chats, give-and-take and personal nuances, which Zoom images can’t deliver.

Many of us know that a full return to the boardroom like in the good old days might happen again soon. However, there’s another way to meet and govern efficiently through hybrid board meetings, with some attendees located at headquarters and others being remote.

The move to all virtual online governance was a sudden fait accompli. None of us had a choice and we had to make it work. Improvisation, missteps and oversights were the rule for early virtual board meetings but it was that or nothing.

And no governance whatsoever would never be acceptable to regulators or investors. Therefore, a move to hybrid board meetings is more gradual and voluntary, yet more uncertain.

So how do you decide when to return to in-person meetings? Who can still stay remote and who will show up in the boardroom – and how do you make that decision?

Is unwillingness to travel an acceptable excuse from a director? Will you stick with virtual board committee meetings for a while? And are you returning to the boardroom for better governance or because some members prefer it?

When you locked down your boardrooms back in early 2020, everyone accepted some miscues and fumbles in governance. Now board oversights will lose their COVID ‘shield.’ If some directors end up being better informed than others or a major board decision is fumbled between the ‘in and out’ members, there will be no excuse.

Make your return to the boardroom call with willingness to turn your default board meeting ideas on their heads. The first question shouldn’t be ‘can we go back to some live governance yet’ but rather, ‘why shouldn’t we stick with everyone on the board meeting remotely?’

What specifics can you improve by having at least some board members and staffers together at company headquarters instead of what you’re doing now?

There are legitimate answers for this question. Sometimes staff presentations work better with an on-site team approach. Deep dive strategic thinking and new board member interviews are being done virtually but an in-person group improves depth. Who will stick to remote participation and who will come to the boardroom – and why?

Though your management team has been working its way back into the office, debates over this have grown wider.

This means that the CEO, CFO and other top managers are the ones most likely to be dusting off the boardroom with independent outside directors joining virtually. This will also necessitate the presence of an independent board chair or lead director who is remote to be on site.

Anecdotal evidence suggests that CEOs are the ones pushing workers to return and they extend that view to their board members too. This is the moment when independent board leadership needs to step up and act as a sensitive negotiator among the various views of the chief, other staffers and outside directors.

There are shifting views among board members on returning to the boardroom and an effective leader should serve as an honest mediator.

Assuming you have a consensus that your board will meet with some members in the boardroom, ask how it can work best. Corporate boards have always seen outside independent members as being a step behind the management members who are immersed in the company on a daily basis.

Board meetings with a huddle of the CEO and top managers on-site, and everyone else on their distant Webex screens, can aggravate this mismatch. When deciding on a hybrid board meeting, it may be wise to assume that all insiders stay inside and outsiders stay outside… but it still isn’t good enough.

Don’t base your video, audio, presentations, portal resources and so on solely on their convenience and practicality. The easiest hybrid format might not be the best. And the assumption that having some directors together at home base and the rest being remote creates an ‘in’ and ‘out’ two-tier board.

The ‘in’ group gets to chat in advance, plan their agendas and responses, and exchange knowing glances during the meeting while the remote group feels like second-class citizens. Measure every element of your hybrid board plan and tech by how well it counters this.

And be willing to make life a little more difficult for the ‘in’ group to even things out.