To start with the obvious, the global coronavirus pandemic is very clearly a rapidly evolving, complex, multi-factor event with significant downside potential over both the immediate short and medium-longer terms. Consumer behaviours and attitudes, financial markets and the political, fiscal and regulatory response are all developing at pace with little certainty or predictability. Firms need to be thinking and acting with similar dynamism to manage the here and now and plan effectively for multiple future scenario pathways. But how to do this in an informed way?
Earlier affected countries
In the absence of meaningful past scenarios (COVID-19 is increasingly being viewed as unprecedented compared to recent previous outbreaks such as SARS and swine flu), the practical experiences of firms in regions hit earlier by the virus may be invaluable, even though the lead time may only be a matter of weeks or (at best) months. In this context, Vicky Yu, a compliance professional in China, provides just this insight in her recent paper “Risk management during the coronavirus outbreak”.
Three important themes are explored in the paper:
- “An emergency management system is essential” – For UK firms this offers a reminder (if one were needed) that business continuity management should now already be in effect or very shortly needs to be.
Most mature firms should have a plan specifically designed for pandemics/epidemics and the senior crisis management team should be meeting regularly to discuss a growing list of live and emerging operational issues that the virus is creating. This includes, for example, how best to communicate with staff, customers and other stakeholders (such as third parties), implementing measures to limit the spread of the virus on company property and planning how to maintain the operations of the business if working arrangements need to change significantly from the norm.
The experience from Chinese companies is that far more agile decision-making than firms are typically used to may be required in order to access mitigating measures whilst they remain available and effective and to minimise the lag in responding to changing circumstances.
- “Following up on government regulations can be challenging” – New government measures (e.g., travel restrictions, school closures, etc.) may be announced with little forewarning and the timeframe over which firms and their employees then need to react to adjust or comply could be exceedingly short. In these circumstances, Yu stresses that it may be necessary for firms to put additional resources and expertise into support functions such as compliance and human resources (HR).
- “HR compliance needs to be strong” – Like any other function, HR will need to be able to manage through sick leave, self-isolation and social distancing measures (such as significantly increased working from home). However, HR will also need to contend with an increased workload stemming from:
- An influx of employee questions (to which giving a definitive or positive response may not be possible)
- A greater monitoring and reporting ask from management
- Providing direct support to affected employees