At the annual TED conference in 2015, in the midst of the Ebola epidemic, Bill Gates gave a chilling talk on “The Next Outbreak? We’re Not Ready.” In retrospect, his words presaged what has become known as the novel coronavirus COVID-19 pandemic, a black swan imperative all governments, communities, and corporate leaders are having to address across the globe.
The pandemic is testing each and every company for business resilience, digital agility, effective communication and adaptability to innovate on workforce planning to mitigate supply chain risks. In moments of crisis, especially one so unprecedented, modern governance matters more than ever.
In the course of conversations with corporate directors and executives, we have collected a number of insights including those from our combined experiences in North America, Europe and the UK.
- Firstly, in nearly every conversation, leaders emphasize the importance of communication and the availability of top management and board members for regular updates. A weekly or (in times of crisis) a regular timely update from the CEO and a chairman is a sensible thing to establish, and a good sign there is an alignment between the executive management and the board.
- Being humble about the unknown seems to be a better strategy than overconfidence about minimal impact of the pandemic. Sticking to what the data and trends say is a good way to demonstrate the situation is managed, not endured therefore mitigating further anxiety. This practice is particularly important in relation to employee anxiety, and policies on how to engage with the direct workforce vs. contractors. Transparency and timely communication are a sign of good leadership, even if it is not always good news to disclose.
- Providing a safe environment for employees, extended workforce, contractors and freelancers alike is crucial. Some boards are updating corporate policies to include support for employees with children, as day care facilities get closed down as “non-essential” facilities. One company we spoke with evaluated the option of reaching out to retired employees as an additional childcare resource. These measures might seem like luxuries; however, it’s a sign of a company’s sustainability, cultural maturity, health and stability to provide a safe place for all employees.
- Further, selecting the right tools for secure communication among the company’s leaders is a critical part of modern governance. In order for the board and senior management to stay in regular touch and freely discuss sensitive topics, companies should provide secured channels that allow instantaneous encrypted transmissions to leaders’ mobile devices. As boards and senior management teams are unable to meet in person, using online apps for secured file-sharing and facilitating online meetings can spell the difference between successful leadership and a breakdown in the chain of command.
- Unfortunately, cybercriminals are currently putting additional strain on the efforts to contain the impact of COVID-19. The outbreak has been a popular topic of discussion on cybercriminal forums, which advertise new COVID-19-themed phishing schemes. Cybersecurity risk should also be a topic of review in board meetings, and that is particularly true now. There is no business resilience without a good cyber-defense, and now might be a good time to update (and even upgrade) your company’s cyber risk policies and practices.
- Finally, some companies currently fight for their very survival. Boards are deciding on cutting pay for top executives, and ceasing to pay or substantially reduce board fees while CHROs negotiate with trade unions. Meanwhile, even more companies are addressing supply chain stabilization as an important driver for business viability. Some corporate directors now realize their businesses didn’t have a good vendor management system in place, nor a solid third-party risk management system. COVID-19 might be a turning point to reconsider and review suppliers’ relationships and the exposure they represent for companies.
These measures will be helpful to companies to consider throughout the emerging crisis.