Dallas Kayser, the chairman at $5.1 billion City Holding Co. in Charleston, West Virginia, says his board has essentially been “on call” throughout the coronavirus crisis, with more frequent board and executive committee meetings to discuss issues like how the bank will offer small business customers the Paycheck Protection Program loans launched under the Coronavirus Aid, Relief, & Economic Security (CARES) Act.
But given the nature of the pandemic, which has shut down many sectors of the U.S. economy, directors aren’t meeting face-to-face in the boardroom. Instead, they’re meeting virtually.
Covid-19 has quickly changed how boards conduct their business.
Meeting virtually isn’t new. We’ve had the technology for years, and many boards already had some sort of virtual attendance option in place for far-flung directors — snowbirds, for example, or those more distantly located from the bank’s headquarters. The difference now? “This is the first and only time we’ve all 100% been forced to do it, if we want to meet. That’s why it feels new,” says Dottie Schindlinger, the executive director of Diligent Institute, part of governance software provider Diligent Corp.
As boards have quickly learned, there are important considerations to keep in mind when meeting virtually. Bank Director compiled the following checklist, based on conversations with industry experts, for your board’s consideration as it navigates this shift.
1. Establish ground rules.
First, the board should understand how state laws and other regulations govern virtual board meetings, including how it will impact procedures like establishing a quorum and voting. Also, review the board’s policies and bylaws to see if they should be updated for meeting virtually.
You’ll also want to consider how the technology used by the board impacts seemingly simple matters like minutes and roll call. If the board is using an audio-only format, a roll call will be necessary. It will also be important for directors to introduce themselves before speaking, to ensure accurate minutes.
The board should also weigh the pros and cons of audio versus video technology. Many find discussions more productive through video, due to the ability to pick up on others’ visual cues.
However, using video raises new questions that boards will have to consider. Should someone record the meeting? Should directors be required to use web cams, so everyone can see one another? Should directors be encouraged to use headsets, to ensure conversations are private? And if the bank’s staff runs the technology, how can the board meet in executive session?
And it’s important to understand any technology needs directors may have now that they’re logging in from their homes. The iPad the bank purchased a few years ago may not be able to run the latest and greatest video-conferencing solution. Also, someone at the bank will need to serve as “tech support” as the board gets used to this new way of meeting.
2. Rethink the agenda.
Consider shorter, more frequent meetings, and focus the agenda on the critical issues that the board needs to discuss at that time. Ensure materials are received in advance to allow sufficient time to review, as directors can’t spend time catching up during the shorter meetings. And clearly define roles in advance, if needed. Who will lead the discussion on a particular issue? Who will take minutes?
Also, wrap up the meeting by reviewing the key items discussed and items that require further action, recommends Denise Kuprionis, the president of The Governance Solutions Group.
And sometimes, old-school methods work. Kayser at City Holding prints out the agenda, so he can check off items as they’re discussed.
3. The role of the facilitator could evolve.
The chair or lead director should make a more concerted effort to engage every director. Everyone’s voice should be heard.
Kuprionis recommends keeping a list of all board members at hand, so no one’s forgotten. “You’re listening to a conversation, you’re participating [and] you get caught up,” she says. “If you have that list in front of you … it helps you remember who’s not there.”
Also, be emboldened to speak up when someone’s dominating the conversation. It’s easy in face-to-face meetings for a single individual to do this; the problem is compounded when visual cues have been removed. Discuss — as a board — how these directors can be reined in. One solution Schindlinger recommends is time limits. When one director has spoken for a predetermined time limit, the chair can interrupt or mute that individual, and move on to request input from other board members.
For more on facilitating effective meetings, read “A Roadmap for Productive Board Discussions.”
4. Ensure secure communications.
Not all formats provide the security boards need, so that should be considered as specific technologies are reviewed. Are passwords required? Is there a waiting room feature, so guests — like executives — can be held outside the meeting until the board is ready?
You’ll also want to wean directors off paper packets, or at least talk with some directors about how to access and print their materials securely. Don’t discuss board business via email, says Schindlinger. “You know the old adage, ‘never waste a good crisis?’ Well, hackers have really taken that to heart. They are looking for opportunities to exploit all of us right now, because we’re vulnerable,” she says. We’re stressed about the pandemic and the economy, cooped up in our houses and spending more time online. “This is not the time to send out stuff via email.”
Also, consider how side conversations will be managed. While Schindlinger says assigning a “board buddy” can be helpful to new directors trying to gain a grasp of the board’s culture, those conversations should be secure — not through text or email. Board portals like Diligent or Nasdaq’s Director’s Desk, which is used at City Holding, allow directors to conduct one-on-one exchanges safely.
Virtual board meetings could become part of the new normal that emerges out of the Covid-19 crisis. It may be awhile before we’re all ready to convene in groups and what’s more, some directors may like the experience. Kayser sees benefits in saving travel and time, along with the ability to schedule discussions on short notice. However, he also feels that discussions on deeper issues — an acquisition, for example — could be challenging.
Boards have an opportunity now to figure out how to make virtual meetings work. “There are no playbooks about this stuff right now,” says Schindlinger. “The right answer is going to be the right answer for your board. Your board is going to come up with the right ideas and vote those in. Just have the conversation.”