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In times of crisis, whether economic, health-related or geopolitical, a company’s stability and resilience are severely tested. The decisions to be taken are often complex and urgent, and it is at these critical moments that the role of independent directors proves essential.
Objectivity at the heart of governance
One of the main assets of independent directors is their objectivity. With no direct links to operational management or majority shareholders, they are in a position to provide an outside view, free from conflicts of interest.
In times of crisis, this independence becomes a precious resource. It allows us to avoid decisions dictated by urgency or emotion, by favoring a more rational and strategic approach.
For example, in the face of a financial crisis, an independent director will be able to advocate cost-cutting measures or the redirection of investments towards more promising sectors, without being influenced by internal political considerations or pressure from certain shareholders.
This ability to focus on facts and data helps reinforce the credibility of decisions taken, both internally and in the eyes of external partners, such as investors.
A diversity of skills at the service of the company
Independent directors are often chosen for their specific expertise, whether in finance, law, risk management or human resources. This diversity of skills is particularly beneficial in times of crisis, when the challenges are multiple and require adapted and diversified responses.
Take the COVID-19 health crisis, for example. Companies had to navigate in an unprecedented context, with considerable health, economic and social issues at stake. Thanks to their varied skills, the independent directors were able to provide invaluable insights on subjects as diverse as business continuity, employee protection and access to government aid. Their ability to analyze situations from different angles has enabled us to develop more comprehensive and robust strategies.
Support for management in tense times
In times of crisis, the pressure on management teams is immense. Independent directors play a key supporting role. Their experience and hindsight help to moderate debates and assist in making difficult decisions.
What’s more, their presence on the board can reassure shareholders, employees and other stakeholders that the company is in good hands.
This support is also psychological. By being trusted partners, independent directors provide a forum where management can express their concerns and test their ideas without fear of judgment. This is particularly important for maintaining a positive dynamic within the management team and avoiding decision-making burnout.
In the end, crises, no matter how fearsome, often reveal the true nature of organizations and their leaders. And it is precisely at such times that independent directors show their true worth.
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At APIA Swiss, we can help you or redirect you in this regard.
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APIA Swiss Team
The role of independent professional directors in times of crisis
