Forty percent of corporate boards had no risk mitigation plan before the novel coronavirus outbreak, according to theBoardlist survey results released April 28.
Half of board directors responding to the survey said their primary role during this crisis is providing external perspective and information. Twenty-two percent said they are focused on scenario planning, while 19% said they recognized the importance of providing emotional support for the CEO. Over a third (37%) said their companies have implemented layoffs or furloughs.
The directors said their primary concerns are: cash management, business continuity, long-term business impact and employee safety. "The results of this survey really highlight how fraught this time is for companies across the spectrum," Shannon Gordon, theBoardlist CEO, said in a statement. "We are hopeful if there is any silver lining it is that boards are more informed now about how to make it through a crisis and will be better able to implement more risk mitigation and planning moving forward."
The pandemic shutdowns and ensuing business struggles may prompt employers to reconsider the value of crisis management and emergency planning. Senior leaders at Verizon credited the company’s pre-existing business continuity plans for their ability to take 90% of the workforce remote while maintaining critical services.
"Those boards that have a regular practice of identifying the biggest risks facing their business and thinking through how they will react to minimize the impact might not get it 100% right but are much more likely to be well-positioned to weather the storm," Gordon wrote in a blog post.
The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) published guidance on planning for workplace emergencies and evacuations. Designating a response team of cross-functional leaders is one of the primary recommendations from OSHA and other sources; that group can devise procedures for possible emergencies and lead crisis response for the company, it said.
While the coronavirus pandemic is unlike any major recent event with respect to its global impact on businesses, having any plan may be better than working from scratch once times are tough, as Gordon noted. Having a structured plan can pay off because disasters — often weather- or economy-related before COVID-19 — usually arrive without warning.
Financial risk management is another aspect of disaster preparedness. With companies looking implementing pay cuts, layoffs and furloughs to cut costs amid the pandemic, the ones that are able to hold on to talent, treat employees well during the crisis and expand benefits and workplace safety measures may be best-positioned for long-term success. "How employers manage their workforces across the next five weeks will have lasting implications for their employment brand for the next five years," Brian Kropp, chief of research for Gartner’s HR practice, told HR Dive in a recent interview.