Time for an End Run?
November 29, 2014
Scotia Assurance, a 150-year old UK insurance company, is ending a bad year as the company is being investigated for a securities fraud scandal. The CEO and his chosen successor, the CFO, have been forced to resign. Arlyn James, the head of human resources, would like to take the opportunity to improve the current situation and recommends some changes to the company. Arlyn shares her suggestions with the chairman of the board but he does not share the same vision and would like to go with a more traditional approach. Arlyn has identified a candidate that has the potential to achieve her vision but unfortunately the board chair is not supportive. Arlyn is frustrated and considers talking to other board members. By talking to other board members, Arlyn is risking her own career and the trust of the board. The company is facing much scrutiny given the current investigation. It is important that these changes are carefully assessed and a shared vision for the future is embraced by all stakeholders. Otherwise nobody wins, least of all Scotia Assurance. As a member of the Board of Directors at Scotia Assurance I am concerned that current crisis of the company needs to be addressed. It seems that the board chair may be depriving the organization of strategic thinking at a time when the organization needs it most (Wootton & Horne, 2010). While it is important to search for a new CEO, I recognize that this takes time, particularly if we want to select a right fit. As a board, we need to make sure that we have a current plan for the current crisis in the company before it further impacts board members, employees, investors, and customers. Once we have met the current need, we need to consider the strategic plan to overcome the crisis of today and prepare for a new future. The board needs to be able assess the current situation with the company to determine the plan of action. They must diagnosis the need for change and the potential resistance to change. All stakeholders need to be assessed, including the board of directors. Are all the board members on the same page? As a board member, there needs to be some awareness of the board’s own role and potential negligence in this current crisis as they consider the governance structure and their responsibility in this problem. If things at the board level do not change, how will stakeholders have trust in the future of the organization? This will be an important first conversation to make sure that I can engage all board members into agreeing into this evaluation process and to be able to overcome forms of resistance that we can anticipate to occur. There may be value in working with Arlyn to gather more evidence to understand and assess what is needed for this company’s future. We can use the data from the employee survey to help show the other members how this crisis is impacting this important group of stakeholders. When employees are not engaged, this impacts the company negatively. According to the Gallop survey, low employee engagement impacts profitability, employee turnover, productivity, customer service, safety incidents, shrinkage, quality, and absenteeism (Sorenson, 2013). In addition to the employee survey, we need to gather feedback from other stakeholders. How has this recent setback impacted their market competitiveness and future potential? How do current customers and future customers view the brand of the company? Where do the other board members stand? What needs to change to overcome some of the concerns of these different stakeholders? All of this data needs to be reviewed with the entire board of directors, not just a select few or even just the board chair. In the book “Influencer”, the authors remind us of the need to diagnose before you prescribe (Grenny, Patterson, Maxfield, McMllan & Switzler, 2013). They remind us that we need to make sure that...
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