For Businesses Coping with COVID-19, Varying Responses Add Complexity

Hands holding We Are Open sign after pandemic

May 06, 2020

Hands holding We Are Open sign after pandemic

As businesses cope with the COVID-19 pandemic and move toward reopening, the management of the process—and the risks involved—can vary significantly from country to country.

A panel of risk managers—all of whom represented multinational organizations—participating in a recent webinar addressing COVID-19 issues presented by the Federation of European Risk Management Associations, noted the complexity added to the process by the different pandemic responses employed by various countries.

Athina Pehrman, group risk manager at Electrolux Professional Group in Sweden, noted the differences in the responses between her home country and Italy, where much of the company's top management and manufacturing are located.

Sweden's approach to addressing the pandemic involved no strict government lockdowns. She noted that Sweden has the highest number of single-member households in Europe and almost no multigeneration households. Meanwhile, the country's population is small relative to its geographic size compared to other countries in Europe, and the population tends to engage in less social interaction than in some countries.

"All of this helped in mitigating the spread to begin with," she said.

The government did advise older people to stay at home and encouraged the population to refrain from using social transportation or gathering in large groups and to work from home if possible. "This strategy has been successful in Sweden in the sense that the number of new cases has not increased dramatically since the crisis has started," Ms. Pehrman said.

In comparison, the government in Italy took a much stricter approach to managing the spread of COVID-19. "It's a challenge for a Swedish-listed company with most of your management based in northern Italy and also our largest manufacturing facility is in northern Italy, and Sweden and Italy have quite opposite strategies," Ms. Pehrman said. "We decided early on to apply the same strict measures from Italy globally as a company, so I have been working from home in Stockholm since mid-February."

"The highest point of complexity is the management of different situations in different countries," said Franck Baron, group deputy director risk management and insurance at medical and travel security company International SOS in Singapore. He noted the different approaches between China and South Korea.

China is now largely moving away from strict lockdowns and back to business as usual, he said, though inbound international travelers are still barred from entering the country and testing is required before entering Beijing or Hubei province. Workers are back in their workplaces and bars and restaurants are open, though people are wearing masks, Mr. Baron said.

"An interesting point about China, this de-escalation is up and running, but they already had to re-escalate in one province because the number of cases is going up," Mr. Baron said. So, as businesses move to reopen, they should be prepared to re-implement restrictions if conditions make it necessary, he said.

While China's approach to controlling the pandemic involved strict lockdowns, South Korea focused on a test and trace strategy to reduce the spread of the virus. "They've been very successful doing this," Mr. Baron said.

There are different ways for various countries to approach the crisis, Mr. Baron said, and each country will be at a different place on the curve. But for employers looking to reopen and protect the health and safety of workers, "It's really how to cope with the wide variety of different situations in different countries."

Trusted information is essential. "Today, there is too much nonverified, false information spreading through social media," he said. It's important to get accurate information to employees on a regular basis. Then a company needs a return-to-work plan that addresses such practical issues as cleaning and hygiene protocols and how to deal with employees who become infected.

Gaetan Lefevre, group risk, insurance, and ethics manager at CMI in Belgium, said that in the face of a crisis like the COVID-19 pandemic it's essential to have a properly organized crisis committee, the involvement of key individuals, and communications—both to provide accurate information and proper instruction to employees and to provide necessary information to the executive committee to guide decision making.

He noted that the pandemic is a combined health and economic crisis and suggested that in such a crisis the risk manager becomes even more important.

Alessandro De Felice, chief risk officer at Prysmian Group in Italy, said that as an organization addresses a crisis like the COVID-19 pandemic, the risk manager can help provide the board and top management analysis on issues like credit and liquidity, risks such as business continuity and supply chains, and strategic issues like market demand and price.

As businesses reopen, it's important to consider that many employees might face constraints with family issues, so the company should show they're concerned and try to help workers address them. "It's not only a matter of safety, which is a duty, it's also a matter of duty of care," Mr. De Felice said.

Francois Beaume, vice president of risks and insurance at Sonepar in France, said that as companies develop plans for reopening workplaces, they must assess all the pandemic-related data available in each country where they do business, as well as information on COVID-19's impact on the company's operations in each country.

It's also important to consider employees, recognizing that those who have been ill might have difficulty returning to work immediately or may require adaptations, Mr. Beaume said. It's also necessary to adapt workplaces to allow for such requirements as social distancing.

It also might be necessary to rethink shifts and how people work and how meetings are conducted. "Meetings may be more virtual as they were during the crisis," Mr. Beaume said. "Travel will be quite complex or limited."

The entire process should be a collective effort, he said. "All of that allows the risk manager to build up a clear vision of the impact of the crisis right now and the possibilities of reopening or restarting activities in an almost normal mode and what kind of phasing can be implemented," he said.

May 06, 2020