Coronavirus - Succession Planning

Coronavirus - Succession Planning

April 22, 2020

 

Photo by Emma Matthews Digital Content Production on Unsplash

 

One of the interesting features of the current lockdown is how it seems to be enabling people to open up their minds on thinking about their businesses.  Maybe it has something to do with our seeing how the Powers That Be are restructuring themselves away from the traditional confrontational model that has evolved over the history of modern democracy and adopting a more collegiate approach.

 

Part of that greater visibility is very much in evidence at the moment with Mr Johnson finding himself battling with the more severe manifestation of COVID-19.  Apart from some minority extreme views – including a town mayor who has been sacked by her party for saying that Mr J’s suffering in ITU was completely deserved – expressed by media trolls, there has been some welcome and very human support unfettered by political issues.  Mr J’s plight has also brought into very sharp focus how the Government is dealing with his absence.  The answer is in a largely seamless temporary transition of responsibilities for maintaining momentum and direction.  Business goes on and the fight against the virus continues.

 

So how is this reflected in the running of our own businesses?  Key and core compliance standards state very clearly that we should all have an effective and implementable Business Continuity Plan in place.  This is not just a Disaster Recovery Plan, which deals with how we get back on our feet after being stopped in our tracks.  The key word is “Continuity”, implying that although we may feel pain from a traumatic event, business goes on with both momentum and direction. 

 

A key element of this is in our succession planning.  This doesn’t just involve who’s going to take on the role of Senior or Managing Partner, MD or CEO or indeed who is next going to be elevated to an equity position.  We are looking at a whole range of situations where team leaders or individuals with key roles in fee earning teams (and including key admin/management roles such as COLP, COFA, MLRO, DPO) need to be backed up by someone capable of filling those roles without internal or external customers being able to see any perceptible join.

 

Of course, in smaller firms it may be that there simply isn’t the internal resource to fill the void.  In these circumstances you may have to look to external help from another like-minded firm, or other outsourced resourcing, for example in compliance or parts of the necessary financial management.

This is all an important part of the duties to clients set out in the Principles.

 

There are other aspects of Continuity Planning that are often overlooked that are significant in securing stability in a crisis: 

  • When did you last check your non-PII insurances?

 

Are your

  • KeyPerson Insurances,

  • Health Insurances, and

  • (if the worst comes to the worst) Life Insurance Policies

 

maintaining an appropriate level of cover?  Providing effective continuity through locum cover can be an expensive business, especially when you’re still paying a high-level salary to the affected person. 

 

And fee-earning will inevitably see a drop in the early stages of cover.

 

It’s also vital that when planning you ensure that you have the right person in the role of back-up. 

 

Remember that: - 

  • It’s emphatically not a paper title – the nominated person must know what’s involved and be committed to take on the task. 

  • There should be consensus in the Management Team that you have the right people in the right posts. 

  • The rest of your colleagues at all levels should also be fully aware that you have a plan in place and who will be doing what. 

  • Are the deputies properly trained in what they’re supposed to be covering? 

  • If not, urgent steps need to be taken for the right level of training to be delivered, whether sourced internally or externally. 

  • The regulatory bodies will need to see audit trails both of the decision-making process and the training plan and schedule. 

 

So once again it turns out that “bare” compliance issues in the COVID-19 crisis have much more flesh on them than you would first expect and are closer to the heart of how we manage and lead our firms than we might have anticipated.  Nobody could have foreseen the cataclysmic effects of Coronavirus four months ago when the issues uppermost in our minds were the Election and Brexit.  But that doesn’t mean we should feel that we’re too late to get to the party of making our SOP’s and Compliance Policies really relevant and fit for purpose.  And without relishing the thought of ending on a pessimistic note, if there does turn out to be a second wave, wouldn’t we prefer to be prepared?

 

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