Search this website. You can use fund codes to locate specific funds

How can companies mitigate the worst impacts of the coronavirus?

The coronavirus pandemic is forcing governments around the globe to enact emergency legislation to contain the spread of COVID-19, with cities in lockdown, shops, theatres and restaurants closed, and office workers logging on at home. In a two-part series, EOS at Federated Hermes (EOS) examines the role that boards can play in crisis management and how companies can manage supply chain risk and support their employees as working arrangements change.

Part 1. The roles boards can play in crisis management

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:

  • Manage according to the momentum of the crisis
  • Manage the complexity as the crisis unfolds
  • Document learnings to enhance innovation and crisis resilience

We also encourage boards to consider establishing a clear business purpose statement to guide ethical behaviour.

Part 2. Supply chain risk and employees  

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.

Engaging on COVID-19

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.

  1. 1“How and why human capital disclosures are evolving,” published by EY in October 2019.

More Insights

Marking UN Day
To mark UN Day, we are focusing on four sustainability challenges identified by the UN Global Compact.
Credit investors: delivering into the imperatives of Paris
Credit Pulse: market update – 16 October 2020
Weekly Credit Insight
The amount of negative-yielding debt is nearing an all-time high.
Direct lending: uncovering the private nature of ESG
We incorporate meaningful ESG analysis into private debt investing using a three-pillared approach.
When the chips are down: the outlook for semiconductors
Positive technology tailwinds are expected to lift the semiconductor market