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Ground Zero for the Boardroom

By James Kristie

What you don’t know or fail to anticipate can land you square in your own boardroom ground zero.

James Kristie

W h a t i s t h e r o l e o f a b o a r d o f directors? There are a lot of ways to answer that question, but you can’t go wrong with this classic response: “To ensure the continuity of the enterprise.”

A dear departed colleague and Directors & Boards author, Tom Horton, put it this way 20 years ago in our pages: “A primary responsibility of every board of directors is to secure the future of the organization. The very survival of the organization depends on the ability of the board and management not only to cope with future events but to anticipate the impact those events will have on both the company and the industry as a whole.”

Well said. But if you are a director, you have to be in the camp of our nation’s secretary of defense when he ruminated in a press briefing in February 2002: “As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. That is to say, we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.” I’d say Donald Rumsfeld pretty well pegged the state of affairs that exists in every boardroom in America today.

improperly responding to the “known unknowns” can be devastating. Then layer on top of that the realization that you can be hit with “unknown unknowns,” and you as a director have to wonder if you are a sitting duck in a future boardroom ground zero. Not an enviable situation.

It’s not atypical for a director to feel informationally deprived under the best of circumstances. Under uncertain circumstances, when a board has serious continuity issues on the agenda, an information deficit can be disastrous.

It is incumbent on directors to demand information and insight that will help them secure the future of the organization—which could be everything from the seemingly most innocuous moves by a competitor to the most threatening moves by a foreign nation potentate.

Outside of your own company’s channels, there are lots of resources to draw upon for setting your own early warning system mindset. The trend spotters at McKinsey & Co., for example, issued earlier this year a “Ten Trends to Watch” advisory—macroeconomic trends (“The consumer landscape will change and expand significantly” is one), social and environmental trends (“The battlefield for talent will shift” is another), and business and industry trends (“New global industry structures are emerging” is a third for your radar screen).

Group Trend/Forecasting Report. The briefing is compiled by the strategic communications consultancy headed by Robert Dilenschneider (who we count as a valued member of the Directors & Boards editorial advisory board). The in-depth and data-packed report is must reading for business continuity planning. (Contact the firm at 212.922.0900 to be put on the list.)

And there are other “survival guide” must-reads. This Boardroom Briefing is one. This is the sixth in a series of single-focused reports on matters of utmost concern to enlightened board decision making. The advisories in the following pages will help you skillfully address your contingency and crisis planning requirements.

On a final note, my son gave me the hugely popular book Freakonomics as a Christmas present. In it is this observation: “The modern world, despite a surfeit of obfuscation, complication, and downright deceit, in not impenetrable, is not unknowable, and—if the right questions are asked—is even more intriguing than we think. All it takes is a new way of looking.” Again, well said. That is your job as board members—to ask the right questions and to be the “new look” eyes and ears for the management team. This Boardroom Briefing will seed many of those questions that you might ask.

The challenge for boards is that the result of not anticipating or

You also can’t go wrong being on the distribution list for the Dilenschneider

James Kristie is editor and associate publisher of Directors & Boards. He can be contacted at jkristie@ directorsandboards.com.

Boardroom Brieng: Business Continuity and Disaster Recovery

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