In January 2020 the World Health Organization (WHO) declared the outbreak of a new coronavirus disease in Hubei Province, China to be a Public Health Emergency of International Concern. WHO stated there is a high risk of the 2019 coronavirus disease (COVID-19) spreading to other countries around the world.WHO and public health authorities around the world are taking action to contain the COVID-19 outbreak. However, long term success cannot be taken for granted. All sections of our society –including businesses and employers –must play a role if we are to stop the spread of this disease.
How COVID-19 spreads
When someone who has COVID-19 coughs or exhales they release droplets of infected fluid. Most of these droplets fall on nearby surfaces and objects -such as desks, tables or telephones. People could catch COVID-19 by touching contaminated surfaces or objects –and then touching their eyes, nose or mouth. If they are standing within one meter of a person with COVID-19 they can catch it by breathing in droplets coughed out or exhaled by them. In other words, COVID-19 spreads in a similar way to flu. Most persons infected with COVID-19 experience mild symptoms and recover. However, some go on to experience more serious illness and may require hospital care. Risk of serious illness rises with age: people over 40 seem to be more vulnerable than those under 40. People with weakened immune systems and people with conditions such as diabetes, heart and lung disease are also more vulnerable to serious illness.
Six key areas of focus for organizations
- Develop incident management and scenario plans that are specific to this crisis
- Focus on factually and effectively communicating to stakeholders
- Plan on how to meet government priorities in individual countries and minimise the risk of business disruptions
- Consider accelerating digital transformations as the shift to remote working reveals gaps in IT infrastructure, workforce planning and digital upskilling
- Protect growth and profitability through actions such as scenario planning, more frequent financial modeling exercises to improve resiliency, and new models that incorporate economic impacts of past pandemics
- Take the pulse of your customers, thinking through longer-term considerations around shifts in core markets or business models as a result of the pandemic
Workforce
Beyond human welfare, there are other people challenges to tackle, including how to support remote working at scale.What you can do now:
- Attend to immediate global mobility concerns, such as reviewing travel rules, HR policies, first-aid plans
- Assess remote working strategy, including asking employees to temporarily stop work or work remotely or relocate
- Address strains on a firm’s existing information technology and communications infrastructure in order to support remote working during the crisis
Operations and supply chain
The ripple effects of the COVID-19 pandemic are difficult to model and assess, but global businesses can begin to mitigate supply chain distributions. What you can do now:
- Identify alternative supply chain scenarios — especially as new cases of the virus emerge in different territories
- Activate pre-approved parts or raw-material substitutions
- Adapt allocations to customers and pricing strategies
Finance and liquidity
Financial markets often watch how companies plan for and respond to events like the COVID-19 pandemic.What you can do now:
- Consider disclosures related to direct effects on the results of operations, as well as second- and third-order effects
- Think about disclosures related to risks and uncertainties about the impact of COVID-19 on future periods
- Assess disclosures on the current and future impact on liquidity and capital resources
Tax, trade and regulatory
Navigating complexity and risk in today’s global uncertainty takes more than an understanding of tax and regulatory systems. It is critical that tax functions consider the broader economic, political and societal context you operate in, in order to make informed and compliant decisions that drive your operations forward.What you can do now:
- Effectively manage cash taxes, obtain available refunds and consider local government and tax authority measures in response to COVID-19
- Consider actions to stabilise supply chains while bracing for an unpredictable revenue and profitability mix in key markets
- Assess the resources your company needs to meet your ongoing indirect and direct tax compliance requirements
- Explore opportunities focused on becoming more flexible in responding to arising uncertainties
