How boardroom changes are being used to cope with the Covid-19 crisis
There is no doubt that these are unprecedented times. In addition to the global health threat presented by the pandemic, companies are struggling to cope with the financial implications of global lockdowns.
As FDs work to assist with companies’ planning for negotiating the pandemic and recovering in the financial climate to follow, they are witness to the increased number of boardroom changes that are taking place. According to research by the New Street Group, there were 232 of these changes in April alone. This is a 13% increase on what is considered to be the normal monthly average.
High profile changes across industries
It’s not just one industry that is being affected by boardroom activity, there have been high profile departures in several areas. For instance, Andy Palmer was removed as chief executive of Aston Martin. This was a departure that could perhaps have been foreseen, given the collapse in the luxury car producers profits.
However, the current crisis does seem to have hastened boardroom departures, such as that of Royal Mail RMG boss Rico Back who departed after being in the job for less than two months. This may have been at least partly due to the decrease in volume of letter delivery since the pandemic took hold.
One of the biggest departure stories has come at Easyjet. First, chief financial officer, Andrew Findlay, made his exit. Now, two further members of the board, deputy chairman Charles Gurassa and finance committee chair Andy Martin, are also set to leave. Like all global airlines, it’s a difficult time for the company.
Are all these departures due to COVID 19?
There is no doubt that many of the boardroom departures which have taken place during April and May were already in the pipeline before the pandemic took hold.
However, COVID-19 has increased the urgency with which companies are acting, in order to bring forward board restructuring and succession planning. This is perhaps understandable given the importance of survival in what will be a testing financial environment going forward. Early departures also give board members leaving their current role the opportunity to join another company, to help them fight their own fires.
Reasons for board members to step down
It’s clear that not all departures are the direct result of issues caused by COVID-19. After all, the stepping down of board members happens naturally.
There are many reasons for board changes, including freshening up the structure to revitalise the company and the retirement of board members.
Some CFOs are also tempted to move on if they can see trouble in the future. Of course no CFO could have foreseen the problems of the pandemic in advance.
So, many of the boardroom changes that have taken place may have occurred even if the pandemic had not enveloped the world. However, many of those that were already planned have been instigated early in an attempt by companies to navigate the current situation. It will be interesting to see how many more board changes are used as a means of dealing with the current crisis.
If you are an FD of CFO looking for your next role, register with us. If you are an employer on the lookout for a new FD or CFO, contact us.
Date Posted: July 3rd 2020
Posted By: Laurence Underwood