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Did your board of directors have contingency procedures in place in order to respond to the crisis?

16 April 2020 by Sonia Sharma

This month we decided to see what The Chartered Governance Institute and Core communities thought about how their employer has been responding to the COVID-19 pandemic. Overall, the majority of respondents said they were confident in the way the company is adapting to the situation. One respondent said: “As an organisation, we are experienced in crisis management, but COVID-19 is unprecedented in its approach. That said, I think that our general approach to crisis management has put us in a good position to be able to manage this”.

Another respondent said that: “There are robust contingency procedures in place for a number of possibilities. These have been adapted to respond to the current crisis but it is probably at the more extreme end of what is envisaged by the plans”. Other answers included “not for this specific event, but we did have contingency plans in place to allow us to work from home”, “Not necessarily
‘this’ crisis, but ‘a’ crisis” and “partially – needed to purchase laptops and test working from home”.

We also asked the audience how they felt the pandemic would affect their company in the long term. One responder said: “It will depend how long it continues for. We have contingencies in place and can continue working. We have projects we are delivering in places such as India and Thailand, but those are only due to start in 2-3 months, so there may be some impact if this continues past that” and another said: “Short term we will suffer operational difficulties but longer term we feel our company can play a role in supporting the global recovery”.

Answers to this question were very interesting and varied amongst responders and sectors. One person said: “It will need a change in our priorities from a strategic objective point of view but this will be managed through appropriate governance route. Resilience already reviewed and agreed”. Other answers ranged from “Won’t affect us much”, “Severely”, “It will have a short-term impact on productivity but the lessons learned and experience gained will benefit the business in the long term”, “There will be a significant impact on my company, other businesses and the U.K. economy”, “adversely” and “As a car parts producer it will [affect us], auto sales are down”.

Another respondent said they: “Think it will change dramatically, both in terms of our markets and the way we work going forward”. Other respondents said: “It’s hard to say – it’s too early to tell. Insurance broking tends to fair quite well in a recession, but we are in unprecedented times”, “It will be a tough trading year but, given the amount of work being done remotely I think the way we work will change for the good which may lead to more hot desking and smaller premises, definitely less travel to physical meetings”, “it will impact returns but if anything will make what we do even more important and in demand” and “Considerations around long term working from home opportunities; stronger operationally facilities; technology improvement”.

One clearly stated that the impact of the pandemic is a question that is hard to answer. “This is the $64m question and it depends on too many things to opine. We will come out the other end (strong cash position) but it depends in part on what else comes out the other end”.

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