20 March 2020
Organisations, corporations and people are battling the Covid-19 pandemic today and, in these challenging times, many will look to the board of directors for guidance and direction within the corporate context. This article provides some key considerations that company directors should bear in mind when determining how to protect the company’s business and act in the best interests of the company in a socially responsible manner:
- Identify the relevant interest groups that are or will be affected by the present situation - shareholders, management, employees, customers / clients, service providers, suppliers, etc. Discuss with the board and management what can be done practically, bearing in mind resource constraints, to address the issues that may arise for each of these interest groups.
- Work with management to protect the physical well-being of all employees and persons that the company and its representatives may come into contact with. Consider industry standards in identifying the procedures and processes to put into place.
- Identify the present and potential risks to the company’s business and discuss, with management, what strategies there are to manage and mitigate these risks. Depending on the industry, consider whether there is a need to be in communication with relevant regulatory and government authorities as well as domain experts to discuss and resolve these risks.
- Work with management to set up a crisis management and response team that should be kept up to date on evolving Government regulations and directions as well as the international and regional situation. The crisis management team should promptly disseminate relevant information to the board and relevant company departments. Prompt and continuous internal coordination is key.
- Consider whether changes need to be made to employees’ roles, work arrangements and/or compensation and also consider whether there are types of employees who are particularly vulnerable or may need specific support in these times (e.g. employees who usually do not reside in Singapore or who have family overseas).
- Ensure that the company has business scenario and contingency planning in place and that this is re-visited regularly as the situation evolves. Specifically, for companies which are convening/planning shareholders’ general meetings (like annual general meetings), it would be prudent to work closely with external legal advisors and regulators on the meeting and voting processes, taking into account heightened safety concerns and considerations.
- Ensure that the finance department delivers regular reports on the financial position of the company to the board. It is crucial for management and the board to have a clear and constant sight of the company’s finances, projections and cash-flow, especially in these times.
- Ensure that the legal department is kept up to date on the company’s plans and can advise on whether there are any legal implications to steps that the company may want to take because of the present situation. Keep close to your external legal advisors so that they can provide relevant advice quickly if and where necessary.
- Ensure that the corporate communications department is aware of the company’s plans and actions and can provide appropriate messaging on the company’s response to the crisis where necessary.
- Look forward, assess and consider what opportunities have arisen and may arise in these times. Consider how the company can seize these opportunities, and whether there is a need to change or diversify the company’s business in both the short term and the long term.
- Consider how the company can leverage off new technology, the current disruption and other enablers to further the business.
- Stay calm in these times and communicate regularly with all stakeholders, especially shareholders and employees, to reassure them of strong leadership, continuity and sustainability.