To mitigate the worst impacts of a major crisis, there are several areas for board members and company executives to consider. By managing key environmental, social and governance (ESG) issues adequately, companies will be well positioned to weather the storm and potentially create long-term value for their shareholders and other stakeholders.
We recommend that board members take a proactive role in crisis management by considering the following:
We also encourage boards to consider establishing a clear business purpose statement to guide ethical behaviour.
In the second instalment of our two-part series on crisis management, we recommend that companies improve global supply chain risk management by conducting an impact assessment.
In addition, it is vital that businesses look beyond physical assets to understand their sources of long-term value – intangible assets such as human capital are estimated to account for on average 52% of a company’s market value1. As such, we believe that boards should review flexible work practices to support their workforce.
As the pandemic escalates, our colleagues at EOS are discussing the impact of COVID-19 with companies. These conversations are highly connected to the engagement themes outlined in the EOS Engagement Plan.
We hope that by being open and transparent about addressing a public health crisis through the lens of ESG, we can support companies in being better prepared to create long-term value for all stakeholders.
