Crisis & the Board: How to prepare for “Anything"

There are many different types of crises, and how boards deal with them, so it is prudent to be aware of typical mistakes, what works, and what boards can do to deal well with these situations.   Are there any ‘golden rules’ that can serve as a starting point to prepare a board and ensure effectiveness and performance in a crisis?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses crisis and the board with Barbara Lambert, a professional Board Member who chairs or is a member of the Audit, Risk and Nomination Committees.  Her current and past mandates include Banque Pictet & Cie SA, Deutsche Börse AG, Implenia AG, Merck KgaA, Synlab AG and UBS Switzerland.  Barbara spent 20 years at Arthur Andersen/Ernst & Young as a senior partner and Head of the Audit practice for banks and insurance.  In 2008, she started as Head of Internal Audit at Pictet Group in Geneva and became a member of the Management Board as Group Chief Risk Officer. 

“A crisis coming from external events has more often a greater speed … and internal crises are more likely to be hidden and evolve gradually”
Barbara reflects on her extensive experience managing crises over four decades, having identified clear patterns that emerge in such situations.  

“I wish it was really a once-in-a-lifetime experience”
Barbara describes one of the most critical mistakes she has witnessed boards make during a crisis - underestimating the situation.  Overconfidence often leads to a dangerous mindset of "this cannot happen to us," resulting in a failure to engage in proper scenario planning or not considering worst-case scenarios.  What starts as a manageable issue can quickly snowball into an uncontrollable avalanche. Barbara cites the collapse of Arthur Andersen, her former employer, where what began as a crisis ultimately ended with the company's demise.  

“It starts before the crisis, so the board should know where the company is vulnerable”
Drawing on nearly 40 years of experience in crisis management, Barbara outlines the key practices she has seen boards adopt to navigate crises effectively.  Success begins long before a crisis occurs, with boards identifying vulnerabilities and ensuring regular, comprehensive updates on the company’s risk profile.  She highlights the value of an early warning system. According to Barbara, a well-prepared, united board can make the difference between crisis recovery and failure.  

“I think that there's no miracle, but there's just a solution”
Barbara acknowledges that preparing for crises amidst packed agendas is challenging but insists that the solution lies in prioritising time.  Today’s board roles demand significant commitment—in reading documents and engaging deeply with strategic discussions, management, and fellow board members.  She highlights how the role of a board member has evolved into a full-time commitment. 

The three top takeaways from our conversation are:
1.      Crisis management starts before the crisis, so as a board member, you must ensure that the company is prepared with scenarios, contingency plans and a robust risk management framework. 
2.     Do not overestimate your availability before you accept a new or additional mandate. Honestly, decide if you really have the time to do it. 
3.     Crises and challenges are here to stay because of the current economic, technological and geopolitical environment. As a board member, you need to show that you can be the solid rock to whom executive management can turn.