Covid-19 Virus – How Should Corporations Respond?

16.03.20 Publication:

It is the external economic and business shock that futurists have often warned about, but
most of us never expected to actually happen: a new virus causing a epidemic that spreads
around the world, causing not just fear but also economic disruption even in countries with
the most advanced health-care systems in the world. It has perhaps been thanks to the fact
that this is so unexpected that the reaction of governments and businesses to the covid-19
coronavirus has been so haphazard.

Few, if any, businesses had included in their standard operating procedures any rules
about how to respond to a virus spreading in countries like Japan, France, Britain and the
United States. Naturally, businesses operating in sub-Saharan Africa have clear policies on
how to handle the dangers posed by a deadly disease such as the Ebola virus. But a
coronavirus epidemic is something different.

It is different both because it is much milder in its effects and because it is new. The
novelty of this coronavirus, which first became apparent in the Chinese city of Wuhan in
December, has meant that it has taken time for reliable data to become available about
how dangerous the virus is and about how easily it is transmitted from person to person.
But also the virus’s newness increases its potential to cause public alarm, because unlike
well-known ailments such as influenza both its symptoms and its consequences are

So how should corporate managements respond? And given the experience so far
with the results of corporate and governmental responses, what should companies write in
their rulebooks or policy manuals in preparation for similar occurrences in the future? As
covid-19 has already proven, this is a global issue. No company or other large organisation
can escape its consequences nor simply rely on the actions of others.

The first principle to be noted, which applies equally to such risks as terrorism,
natural disasters or civil disorder, is that managements should never force employees to go
to places or get into situations where they feel uncomfortable or fearful. But then the
question arises: should managements impose a ban on travel or attendance at events or
meetings even though many employees feel perfectly relaxed about going?

Here we see a tension between an organisation’s commercial obligations, its
employment obligations and its social obligations. There have been moments during the
spread of the covid-19 virus where those obligations have pulled in different directions:
while it may be commercially necessary for travel to occur, and while employees may feel
perfectly comfortable about doing it, there may be a social benefit if all companies
simultaneously agree to suspend travel and personal interaction for a period, in order to
slow down the spread of the virus, especially during winter time when health-care systems
are anyway busy dealing with conventional problems.

The principle here is that co-ordination is necessary, probably by either national or
local government, but conceivably at international level by the World Health Organisation.
Close and frequent communication needs to be maintained by companies with those co-
ordinating bodies, in order to receive their guidance or orders on a timely basis but also in
order to provide input from the corporate point of view.

Then, however, a third principle should come in. It is that commercial activity needs
to be maintained, so as to ensure the survival of the business and of the employment it
provides. Bans on travel or meeting attendance should be strictly time limited, unless the
danger posed by the virus becomes proven to be higher than for conventional diseases such
as influenza. In other words, a definition needs to be found and agreed upon for what is a
“normal” risk to take and what is an “abnormal” or highly dangerous risk. Organisations
already distinguish between the risk of sending employees to conflict zones and that of
travel to peaceful cities where conventional dangers nevertheless exist, so it should be no
different with viruses.

Much of the initial corporate response to covid-19, once it began to spread outside
China, looked both haphazard and something of an over-reaction. That may or may not
prove to have been true, but the perception reflected the lack of good governmental co-
ordination and the lack of preparatory thinking by managements. The two longer term
lessons of covid-19, beyond the need for much better governmental co-ordination
nationally and internationally, are likely to be the need to have clear and agreed policies in
place for all such eventualities, and the need to build more resources into budgetary
planning as contingencies for disruptive events of this sort. Covid-19 will not the last new
viral epidemic that spreads around the world.

Image by Pete Linforth from Pixabay