The shock news that the UK’s prime minister, Boris Johnson, is in intensive care with Covid-19 illustrates how all large organisations – and banks are no exception – need a strong back up plan for when the boss is absent. In the UK, the foreign secretary Dominic Raab is now in charge of the government but this episode should prompt top management in all companies and banks to ask themselves how well prepared they are if their CEO becomes seriously ill.
With the threats to global business on the rise, from the current pandemic to a cyberattack or major fraud, the likelihood of a bank being disabled and having to mount a recovery has increased. There could also be a wider attack on the financial system.
Faced with such challenges, no CEO knows exactly how they will cope when under the stress of a major incident which is why being prepared must include having a strong deputy or deputies ready to step in if needed.
A survey by FTI Consulting discovered that a third of business executives have experienced panic attacks, anxiety and other mental health issues as a consequence of considering or dealing with crisis situations. The consultant says that companies “are not preparing leaders sufficiently to manage a crisis”.
The most vulnerable organisations will be those where the CEO takes decisions independently, refuses to delegate or allow his or her judgement to be questioned. One of the many lessons from Covid-19 is that such an old-fashioned style of management is completely unviable in the modern world.
Brian Caplen is the editor of The Banker. Follow him on Twitter @BrianCaplen
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