The revenue falls off a cliff on Tuesday.
By Thursday, a board member has a solution: create a task force, bring in staff, and write next year’s business plan together.
It sounds responsible. It also changes who is managing the organization.
Miriam Carver and Bill Charney use that exact pressure in The Board Member’s Playbook. A trade association loses significant revenue after an economic change. A board member proposes a task force to work with staff on the next business plan.[1]
I understand the impulse. Good board members do not want to watch from the balcony while a crisis burns through cash. They bring experience, relationships, and judgment. A committee feels like action.
But action is not the same as governance.
In Policy Governance, a board committee exists to help the board do board work. It may study an Ends question, examine whether the board’s risk limits are adequate, prepare policy options, or help the board evaluate its own response. It is not a second management team assigned to help staff perform the CEO’s job.
The crisis does not erase that line. It tests whether the line was drawn well.
I would ask four questions before naming a task force.
What result is at risk? The board should identify the Ends that may no longer be achieved. A revenue loss matters because of what it threatens, not because falling revenue automatically moves budgeting into the boardroom.
What boundary applies? Read the Executive Limitations on financial condition, reserves, planning, debt, asset protection, and organizational continuity. If the board has already prohibited unacceptable risk, it should monitor those policies.
What evidence is due now? A scheduled monitoring report may not be enough when conditions change quickly. The board can require timely evidence of compliance without dictating the recovery plan. It can ask the CEO for an interpretation of the relevant policies, current data, forecasts, and the point at which compliance may fail.
What work belongs only to the board? The answer may include revising Ends, changing a risk boundary, communicating with owners, approving a legally reserved action, or deciding whether the CEO remains capable of the assignment. A committee can help with that work.
BoardSource notes that committees and task forces normally recommend action to the full board, while the executive committee may have authority only when bylaws grant it.[2] I would put the mandate in writing: purpose, authority, membership, deadline, and the question the full board expects the committee to answer.
“No joint business plan” does not mean “no help.”
The CEO may ask individual board members for advice. A member can offer a contact, explain a market, or serve as a sounding board. The relationship changes when advice becomes an instruction, when staff begin reporting to the committee, or when the board later judges the CEO for following the plan it helped write.
That is the honest strain in this approach. A capable board may possess expertise the staff needs during a rare emergency. Refusing all conversation would waste it. The safeguard is choice and accountability: the CEO decides whether to use advice, and the CEO remains accountable for operational performance.
You can make this practical before the next crisis.
Adopt a short crisis-governance protocol. Name the policies that will be monitored more often. Define the information the board expects. State which decisions remain with the CEO and which are legally reserved to the board. Describe when a temporary board committee may be formed and what it may not do.
Rehearse the protocol while the organization is calm. Give the board a fictional revenue shock and ask members to name the policy question, the evidence required, and the authority they would keep with the CEO. Practice exposes vague policies and hidden assumptions before money and jobs are at stake.
Storms reveal the quality of the instruments.
A board that abandons its delegation when the weather turns had not delegated very far.
Footnotes
[1] Miriam Carver and Bill Charney, The Board Member’s Playbook (Jossey-Bass, 2004), rehearsal 3.2, pages 28–31.
[2] BoardSource, “Board Responsibilities and Structures — FAQs,” section on committees and task forces.
Additional reading
John Carver and Miriam Carver’s Reinventing Your Board gives boards a step-by-step way to put delegation and policy discipline into practice.
Peter Greer, David Weekley, and Tiger Dawson’s The Board and the CEO is a practical guide to protecting the relationship a crisis can strain.