Boards

How Boards Can Plan for the Disasters That No One Wants to Think About

Pandemics, global warming, cyberattacks, and other catastrophes are a question of when, not if.

by

Seymour Burchman

and

Blair Jones

by

Seymour Burchman

and

Blair Jones

September 04, 2020

Johannah Parkin/Getty Images

Summary.

While some have described the Covid-19 pandemic as a black swan event, in reality it should be treated as a “black elephant” — a cross between a black swan event and the elephant in the room. From climate change to cybersecurity, there are plenty of other visible, looming black elephant events that companies should be preparing for. Successful companies need to build in resilience to prepare for these events around three areas — governance, leadership development, and compensation — where boards should play a special role in preparation for future threats.

It’s tempting to call the Covid-19 pandemic a black swan — an event so unexpected and devastating that companies could not have prepared for it. But experts have been predicting global pandemics for years, and in January 2020, the World Economic Forum’s Global Risks Report cited infectious diseases as a potential threat. Yet very few companies included a global pandemic in their highest risk categories.

SB

Seymour Burchman (sburchman@semlerbrossy.com) is a managing director at Semler Brossy Consulting Group. He has been an executive compensation consultant for over 30 years and has consulted on executive pay and leadership performance for over 40 S&P 500 companies.
BJ

Blair Jones (bjones@semlerbrossy.com) is a managing director at Semler Brossy Consulting Group. She has been named for the last seven years to the NACD Directorship 100 as one of the top hundred most influential leaders in boardrooms and corporate governance, and has been an executive compensation consultant for over 25 years.

How Boards Can Plan for the Disasters That No One Wants to Think About

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