people wearing face masks to protect from virus

How might the situation continue to unfold?

We know that coronaviruses cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).

The most recently discovered coronavirus causes coronavirus disease, known as COVID-19.

COVID-19 is characterised by mild symptoms including runny nose, sore throat, cough, and fever. Severe cases can lead to pneumonia or breathing difficulties. Older people and those with medical conditions (such as asthma, lung disease, diabetes or heart disease) may be more vulnerable to becoming severely ill.

The US is working at pace to lift their test numbers in both public and private laboratories/sites. Australia is increasing testing sites and logistics including ‘drive-through testing / assessment clinics’ in South Australia.

A key concern in all countries impacted is the increasing and potential overwhelming burden on healthcare facilities and healthcare workforce who are at an elevated risk of exposure.

Close contacts of persons with COVID-19 and those returning from affected international locations – currently China, Iran, South Korea, and Italy are at an elevated risk of exposure.

At this time, there is no vaccine to protect against COVID-19 and no medications approved to treat it. Non-pharmaceutical Interventions are actions that people and communities can take to help slow the spread.

Work is progressing at pace by many scientists globally to develop:

  • Coronavirus vaccine – noting risk of virus mutation adds to the complexity
  • Treatments/medications – such as anti-viral medicines
  • Blood tests that look for coronavirus antibodies – in addition to current nose swab tests.

What should organisations be doing now?

Organisational leaders need to understand coronavirus symptoms and what may happen, become well-informed, and have a plan.

They need to establish, or review and enact, the organisation’s business continuity plan.

They need to conduct modelling for at least three scenarios – for example:

  1. Best case – staff sickness/absenteeism is minimal, and productivity, supply chain, cash flow, is only marginally impacted.
  2. Medium case – there is escalating staff absenteeism 10-20%, reduced productivity, supply chains, with cash flow, revenue, moderately impacted.
  3. Worst case – 20-50%+ of the workforce is absent, possibly for an extended period, there is marked reduction in productivity, delayed/ broken supply chains, cash flow pressure and significant revenue impacts.

Review financial position

Organisations need to review the potential impact on liquidity and capital requirements. Given the size or extent of any potential disruption, discussion of potential goodwill impairments may be required, and independent advice sought.

Where should their top areas of focus be?

Stay informed – Identify and follow alerts and advice from credible sources of authority.

The World Health Organisation

Australian Government Department of Health

State and Territory Health Departments

Note: Health Departments have the ability to, and may invoke, significant community directions, and possible fines for non-compliance, to the public, based on the level of public health risk. Being able to demonstrate corporate policy alignment with official recommendations can be an important legal safeguard.

Employee safety

  • Provide education on hygiene and ensure frequent communication to staff and relevant stakeholders/third parties - Wash Your Hands. Avoid Touching Face. Practice social distancing. (Source: Australian Government Department of Health)
  • Be able to demonstrate that the organisation has given employees accurate information about ways to prevent the spread of infection and have provided people with the means to act on the information given.
  • Educate and communicate – Wash Your Hands. Avoid Touching Face. Practice social distancing of one metre minimum where possible. Consider and aim to alleviate stress and anxiety – offer Employee Assistance Program (EAP) access and other supportive measures.
  • Instruct staff to inform management if they have been exposed to the virus or show symptoms. In accordance with formal advice and any public health directives, staff with symptoms of infection should be sent home or instructed to stay home and self-isolate. (Source: Australian Government Department of Health)  
  • Implement measures to reduce the risk of transmission at work. Provide easy access to handwashing facilities and extra hand sanitisers. Ensure public/common surfaces such as desktops, surfaces, doorknobs, and elevator buttons are regularly disinfected. Invoke additional cleaning schedules.
  • Consider changes to reduce close contact such as facilitating remote work, revising internal and external meeting face-to-face attendance, rotating/shift work, possible physical layout changes and social distancing - aim to minimize exposure to environments and situations that could allow for infection spread - avoiding hugging, handshaking, and minimise exposure to crowded places, and poorly ventilated spaces.

Consider restrictions on travel and work attendance

  • Employers in Australia can impose reasonable, fact-based restrictions if there is a direct threat to the health or safety of others where public health guidance or directive is in effect.
  • Written policies should be explicit about when employees with potentially transmissible conditions will and will not be allowed back, and relevant communications documented. Align travel policies with official advice and understand related insurance policy provisions and restrictions.

Evaluate pay and leave provisions

  • Terms and arrangements of any leave payments for self-isolation or sickness should be made clear in existing or revised HR policy and communicated accordingly. Consider and seek independent advice.

Protect privacy whilst also complying with public health directives

  • All personal health data must be handled within the organisation’s data privacy protection framework, in keeping with national privacy principles and other relevant legislation, and through public health directives.

Understand and comply with relevant health directives and other legal obligations

  • Be mindful of other relevant and emerging regulations. For example, building or landlord directives that may be in place in tenancy agreements or may be issued in response to coronavirus or other threats.
  • Understand if force majeure provisions might be invoked. Seek independent advice.

In general, an event that triggers a Force Majeure is an event that is beyond the control of either party that prevents or hinders the performance of the contract. For the duration of a Force Majeure event, the contractual obligations of the contract will be put on hold. Once the event has ended, the contract will recommence.

What is the role of the board?

Boards need to stay informed, ask the right questions, support management, lead through crisis and uncertainty, and continue usual board oversight and director duties.

The board should be satisfied, in relation to coronavirus, with the organisation’s plans and actions in relation to:

  • employee safety;
  • keeping the business operating and viable (cash flow and revenue);
  • complying with relevant public health directives, legal obligations and relevant market disclosures;
  • currency and credibility of information flow and relevant alerts from national and state or territory departments of health advice;
  • staff education, communication and hygiene;
  • the business continuity plan? Is it comprehensive, contemporary and fit for purpose? Does it need updating;
  • aligning internal advice, policy and communications with those from the relevant national and local authoritative credible sources, together with any legal and other advice as deemed necessary;
  • potential impacts to our supply chains and production;
  • relevant and useful lessons from peers, industry, others that we can access;
  • additional resources and human capital management needed that may not otherwise be readily available;
  • frequency and communication of board reports going forward on the issue.
  • the spokesperson(s) on this issue;
  • guidance regarding potential cancelling or modifying large work-related meetings or events and workarounds.

Dr Amanda Rischbieth FAICD will be presenting an AICD webinar on 23 March on how boards can effectively lead their organisations through COVID-19.

Register now

This article is reproduced under licence from Dr Amanda Rischbieth, March 2020