The enduring impact of the COVID-19 pandemic might be forcing companies and other organizations to rethink what skills, qualities, and experience their executives should have if the business is to succeed.

According to Leena Linnainmaa, secretary general of the Directors’ Institute Finland and the incoming chair of ecoDa, the European umbrella group for directors’ membership bodies, the pandemic has prompted many organizations to reexamine the composition of their boards.

Linnainmaa added there is also a renewed focus on boardroom succession planning.

Speaking as part of a Webinar on the impact of COVID-19 on the three lines of defense, Linnainmaa said in Finland the pandemic has resulted in changes in the executive teams in over a third of organizations surveyed and forced a change of CEO in many cases.

Around a third of organizations are actively looking to bring in new executives with particular skills and “know-how” where there are obvious knowledge and experience gaps, she added.

“The next crisis will not resemble the current crisis.”

Nora Gürtler, Head of Group Audit, Assicurazioni Generali

Other experts said companies across Europe are asking the same types of questions about the suitability of the executives on their boards.

Dirk Wegener, global head of corporate insurance for Deutsche Bank and president of the Federation of European Risk Management Associations, said going forward boards will need to give more of their time to discussing and managing risk issues in the wake of the pandemic. There will need to be a “deeper conversation” between executives, risk managers, and internal audit about how companies set their risk appetite and agenda, he said.

Nora Gürtler, head of group audit at insurer Assicurazioni Generali and member of the European Confederation of Institutes of Internal Audit’s insurance committee, said companies will need to have a deeper understanding of emerging risks while also recognizing “the next crisis will not resemble the current crisis.”

As a result, said Gürtler, it is important for companies to be agile and to adapt to circumstances as they occur or change. She added existing business continuity management and enterprise risk management plans will need to be revised; otherwise, “companies will focus on last year’s risks next year.”

The three speakers suggested the pandemic might have prompted several changes that could positively impact corporate governance over the long term. These include an increase in risk management spending; a renewed focus on risk, agility, and decision-making; and a reexamination of company goals and values.

However, they also warned boards should think about what they need from their assurance functions, rather than simply asking for more information. While many organizations are making significant investments in data analytics tools, Wegener warned boards needed to remember the emphasis should be on the quality of data—not the quantity.

“Nonsense in is nonsense out,” said Wegener. “More data does not always mean better assurance. The information still needs to be checked and challenged before it is used to inform decisions. Investing in digital tools to enhance data flows is useful, but there need to be checks about the quality of data, how it is used, and how deeply it is relied upon.”

Linnainmaa believes companies do not need to rush to buy these tools. In her opinion, many organizations already have sufficient amounts of good data, but “they either don’t use it or choose to ignore it.”

She adds the main focus for boards and assurance functions like internal audit and risk management is for companies to “recognize what are their ‘crown jewels’ and think of ways they can be protected.”