56 questions for the board to ask in a crisis

To help boards who are confronting a crisis, we’ve published this comprehensive crisis management checklist. The questions below provide comprehensive coverage across:
1. Overall response,
2. Leadership,
3. Health and safety,
4. Customers and demand,
5. Cashflow,
6. Capital and runway,
7. Sales and marketing,
8. Competitive dynamics,
9. Operational and legal issues, and
10. Long-term opportunities

Overall response 

1. In response to the current crisis, which areas are you most confident the company currently has in control?

    • Visible and strong leadership
    • Clear and decisive plan of action
    • Appropriate communication to all stakeholders
    • Health and safety of employees
    • Health of the customer and demand base
    • Health of supply chain 
    • Strong cashflow/capital position
    • Shareholder and investor support
    • Broader business continuity planning
    • Understanding of opportunities that may exist

2. In response to the current crisis, which areas are you less confident the company currently has in control?

    • Visible and strong leadership
    • Clear and decisive plan of action
    • Appropriate communication to all stakeholders
    • Health and safety of employees
    • Health of the customer and demand base
    • Health of supply chain 
    • Strong cashflow/capital position
    • Shareholder and investor support
    • Broader business continuity planning
    • Understanding of opportunities that may emerge

Leadership

3. In response to the current crisis, which areas have been strengths displayed by the leadership team to date?

    • Focus on health and safety of staff
    • Focus on health and safety of customers
    • Proactive and measured strategy
    • Well understood plan of action
    • Prioritisation and resource allocation
    • Execution of operational details
    • Decisiveness
    • Communication
    • Urgency

4. In response to the current crisis, in which areas are there opportunities for the leadership team to improve?

    • Focus on health and safety of staff
    • Focus on health and safety of customers
    • Proactive and measured strategy
    • Well understood plan of action
    • Prioritisation and resource allocation
    • Execution of operational details
    • Decisiveness
    • Communication
    • Urgency

5. On the spectrum from peacetime to wartime leadership, how would you best describe the current operating mindset of the CEO and leadership team?

6. Is the CEO is communicating effectively to employees and broader stakeholders in response to this crisis?

7. Has the CEO has impressed sufficient urgency into the organisation’s response to this crisis?

8. Are all members of the executive team are appropriately focused on the current crisis and impact across the business?

9. Is the CEO is providing a decisive voice on issues that go to the survival of the organisation?

10. Are members of the executive team are appropriately ‘hands-on’ with operational details in critical functions?

11. Has the board have discussed who would lead the organisation in the case of CEO illness or unavailability?

12. Is the board is focused on not overloading an already busy CEO and executive team with unnecessary work?

Health and safety

13. Has the board have discussed how to manage and respond to any employee’s diagnosis with COVID-19?

14. Has the organisation has implemented alternative work arrangements for as many staff as possible?

15. Does the organisation has plans for how it will support any employees that become ill?

16. Are directors are modelling good hygiene and social distancing behaviours?

Customers and demand

17. What are your current expectations about the short-term demand impact on the company as a result of the crisis?

18. What would the likely impacts on the company be if the short-term demand impact was 50% below current expectations?

19. Assuming this expected demand impact, how could this scenario turn out better than expected for the company?

20. Assuming this expected demand impact, how could this scenario turn out worse than expected for the company?

21. Is the company is being as helpful as possible to our customers right now?

22. Please rank how critical each of the company’s products or units are for customers in the current environment?

23. Which customers represent more than 5% of the organisation’s overall revenue?

24. What would be the consequences of a prolonged shutdown of any of our key customers?

25. Does the company’s supply chain have good overall resilience?

26. Which suppliers represent more than 5% of the company’s overall cost base?

27. What would be the consequences of a prolonged shutdown of any of these key suppliers?

Cashflow 

28. What actions would the company regret not having taken now if survival was on the line in six months time?

    • Raising additional capital
    • Cutting headcount
    • Delaying hiring
    • Moving to a highly commissioned sales model
    • Delaying major capital spending
    • Zero base budgeting
    • Delaying feature development
    • Re-estimating sales pipelines
    • Shutting down underperforming products or divisions
    • Asking staff to take leave
    • Asking staff to take reduced pay and/or hours
    • Renegotiating with key suppliers
    • Engaging with major customers
    • Reviewing customer retention modelling
    • Applying for Government grants or incentives

29. What cashflow costs would be incurred in a 20% reduction in headcount?

30. What is a reasonable expectation for cost savings through salary reviews of current employees?

31. Over the next two quarters, are there material payments across any of the following categories that could be deferred?

    • Substantial capital expenditure
    • Joint ventures
    • Product development
    • Major suppliers
    • Interest and financing payments
    • Tax
    • Rent
    • Dividends
    • Transformation programs

32. If we undertook a zero base budgeting exercise across all departments, which areas do you perceive would be subject to most adjustment?

    • Finance
    • Marketing
    • Sales
    • Product development
    • IT
    • Customer service
    • Human Resources

33. Is the company is taking advantage of all relevant government initiatives (such as stimulus and targeted procurement)?

34. If there was no more external capital available for the company (at any valuation), what changes would be required today?

Capital and runway

35. Approximately how many months of runway does the company have at the current cashflow burn rate?

36. If the company was forced to stretch this runway to double this estimate, how would you do it?

37. In the current fundraising market, how likely is it that the company would be able to raise funds on reasonable terms within this timeframe?

38. Are any of the following possible sources of capital for the company?

    • Customers
    • Partners
    • Accelerating working capital
    • Factoring
    • Deferring payments
    • Equity in kind
    • Bridges from existing investors
    • Drawing down or extending existing debt facilities
    • Grants, incentives or rebates
    • Selling off non-core businesses
    • Cutting board and executive rem
    • Cancelling dividends

39. Do the company’s key investors have a track record of supporting organisations through crisis?

Sales and marketing

40. What is the company’s current risk adjusted sales pipeline for the next two quarters? 

41. Based on the current trajectory of this crisis, what do you see as a realistic close rate across this pipeline? 

42. Are all current customers are profitable for the company on a net basis (once all marginal costs across the business are included)?

43. Are all potential sales in the company’s pipeline are profitable on a net basis (once all marginal costs across the business are included)?

Competitive dynamics

44. Is our company likely to be more resilient than our key competitors to a prolonged crisis?

45. What do you perceive as the likely response from our key competitors to the estimated industry wide fall in demand?
Please identify what you see as the most likely response

46. What high-value acquisitions which may become possible as a result of changes in demand or capital availability?
These may be products, services, locations or sectors experiencing disproportionate impact

Operational and legal issues

47. Is the current frequency and agenda for board meetings is appropriate to the issues facing the organisation?

48. Have the Board and management discussed where the line between board and management sits in respect of the current crisis and circumstances where that would change?

49. Taking into account other responsibilities, does the Chair have sufficient bandwidth to lead the Board’s response to this crisis?

50. In the context of this crisis, do any of the following require short-term action? 

    • Organisational currency risk
    • Currency risk to customers
    • Changes to organisational structure
    • Succession/redundancy planning
    • Asset protection from law or policy changes
    • Holding structures in international markets
    • Asset protection in international markets

51. Has the company has identified all individuals with critical knowledge, experience or contacts who represent single point risks for ongoing operations?

52. Does the organisation have business continuity plans for all individuals with critical knowledge, experience or contacts?

53. Are there any activities that the company is legally or contractually obliged to deliver that are at high risk as a result of this crisis?

54. Are there changes required to the organisational structure in response to this crisis?

Long-term opportunities

55. What difficult yet important long-term decisions has the business been deferring?
Where are the opportunities to “never waste a good crisis” to take difficult but necessary decisions for the long term health of the organisation.

56. Which of the company’s products or services has greatest growth opportunities in the current crisis?
These may be products, services, locations or sectors experiencing disproportionate impact

 

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