Navigating the Pandemic and looking ahead: Risk Management

In times of crisis such as the ongoing COVID-19 pandemic, businesses are required to make important decisions with very significant implications at an accelerated pace and in the face of the unknown. This was the case when governments across the globe ordered borders to shut and non-essential activities to scale down or stop almost a year ago. This remains true as governments have announced and begun implementing plans to restart the economy and financial pressures are mounting rapidly on businesses to resume operations while facing an uncertain economy.

As it becomes legal for businesses to resume operations, careful consideration must be given to the impact of implementation plans on the broader group of a corporation's stakeholders: meeting threshold or generic requirements might not always be "right". Legal as well as reputational risks will have to be weighed and considered on the basis of the subjective characteristics of each business.

As operations resume and corporations plan ahead to the post-pandemic world, senior management teams and boards must also broaden their focus. Beyond the immediate short-term challenges and risks relating to resuming operations, boards of directors and senior management must also keep the bigger picture in mind: while businesses are resuming operations, many will also have to reshape. In some cases it will be a matter of adjusting the plan to get through a very challenging period. In other cases, fundamental strategies will need to be revisited.

Key issues to consider

The following is a list of key risk management topics and issues that we have put together to help directors and corporate leaders identify what they should consider in the days, weeks and months ahead as the reopening of the economy evolves and the pandemic comes to an end. This list was compiled based on our own board experiences as well as ongoing conversations we are having with many directors and corporate leaders across many industries and geographies. There are no "one size fits all" answers to any of these challenging issues and this list is intended to help you structure your plan rather than provide easy answers in uncertain times. The relevance and analysis of each of these items will vary across industry, geography and business:

SHORT-TERM

  • What are the boundaries within which our organization can operate in light of the government restrictions still affecting it? Are we well informed about what is legally permitted? Do we have the right expertise to guide us and adequately understand the risks and relevant standards?
  • What are the standards of care and consultation to which our employees are entitles or feel they are entitled?
  • Is operating within what is legally permitted the best or only an option for our organization?
  • What does a government-backed easing of restrictions mean for our business? Beyond employees, what is the degree of risk to which customers end others may be exposed? Are we prepared to scale back again should it be required?
  • What is our short term financial position? Are there any immediate concerns that need to be addressed? What does an easing of government-backed financial aid mean for our business?

LOOKING BACK AND AHEAD

  • In responding to the impact of the crisis, what was done well and what has been managed poorly by our organization? What could have been done differently? What went right? What went wrong? Do we have potential exposure to the latter?
  • How to better prepare our organization for the next crisis or a seasonal wave?
  • How did the crisis management and business continuity plans respond and adapt to external factors such as any competitor or coordinated industry-wide responses? What can be improved?
  • How did our board perform? Did we make the right decisions? Did we have the right information to make these decisions?
  • Did we properly engage with our stakeholders and with the financial markets? Do we need to change how we engage with them?
  • How did our management perform? Did the crisis reveal weaknesses or succession plan flaws we must address?
  • Did we take governmental financial aid? If so, did we properly use and track it and can we account for it?
  • What will be our response or narrative if the media report about the financial assistance our company received?
  • How can we make sure we take full advantage of new incentives and programs governments may begin to put in place to help restart the economy?
  • Do we have a good understanding of how our markets and customers have changed? Are there new risks and new opportunities that have evolved as a result of the crisis? What about our competitors? Where are they?
  • How healthy is our company culture? How much did it suffer and what needs to be done to restore or improve it?
  • Are there lessons to be learned in terms of the speed and efficacy of management decisions made in the pandemic context which can serve as an inspiration as regards our ability to be faster and more efficient in matters not related to the pandemic?

WORKPLACE AND EMPLOYEES

  • How best to protect the health and safety of returning employees, customers and others? Should vaccination be mandatory?
  • Is our workforce properly informed and incentivized to return to work? Do we have workforce shortage issues? How can we make sure that employees are well informed and protected?
  • If and how should or must our workplace be reimagined? How do workplace ergonomics need to be changed? What are we doing to help our employees adapt?
  • Evaluating investments in the adaptation of workplaces. How much should be invested and should it be for short-term modifications? Should the business be investing in long-term flexibility and adaptability of the workplace and how do you justify the cost or measure the return? What are the capital allocation implications to this?
  • How will employees rank a workplace in the future? Is there an opportunity to create a more attractive work environment which might give our organization a competitive advantage at attracting and retaining talent? For example:
    • Are we prepared to work remotely for an extended period of time? Should flexible or work from home arrangements be utilized more regularly across the business to support the organization's strategy?
    • Does the organization have the right mix of full-time, part-time and casual employees and contractors, especially in light of changes to supply and value chains?
    • Should reliance on external consultants or contractors be reduced and the required expertise be sourced or developed in-house?

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.