Disaster management plans must now include pandemic-related measures, says Deloitte exec
Trust, ethics, and a unified voice continue to be pillars of good corporate governance during crises.
David Chew is the Regional Managing Partner for Risk Advisory at Deloitte Southeast Asia, where he provides clients with expertise in governance, risk management, internal controls and compliance matters.
He also facilitates boardroom discussions and contributes articles and thought leadership materials on corporate governance and risk management.
Invited by Singapore Business Review to be a judge at the Management Excellence Awards, Chew answered some questions on how good leaders can lead by example during tough times and the integration of pandemic-specific measures in business continuity planning.
These are quite challenging times brought by COVID. What good corporate governance best values are best applicable in these times?
Corporate governance is the foundation for company purpose, strategy, opportunity and risk management. It enhances the quality of leadership and decision-making. The COVID-19 pandemic has highlighted the importance of corporate governance in the current context of the global pandemic, environmental crisis, looming recession and social unrest. The added value of having proper governance in place helps companies identify and respond to the right risks.
Large corporations have their business continuity strategies and plans as part of risk mitigation and yet were still caught off guard by the pandemic and lockdowns. What risk management practices can organizations establish to prepare for other similar crises of global scale, such as pandemics?
A business continuity plan covers infrastructure, cyber, employee, business, operational and communication risks, intending to manage an organisation that has to deal with new risks and challenges to maintain operations and production.
Organisations need to have continuous emergency scenario planning for business continuity. Companies must incorporate pandemic planning considerations into existing resilience management activities to provide a comprehensive response and to provide continuity for their most critical products and services. This includes establishing pandemic-specific policies and procedures, capabilities for employee communications, telecommuting and personal/family leave to minimise disruptions.
Business disruptions caused by natural, human-made, technological or operational failures differ considerably from those caused by pandemic events. The differences lie in the potential increased scale, severity and duration of pandemic events, necessitating the need for organisations to expand beyond traditional resilience planning strategies.
The COVID-19 pandemic has illustrated the importance of keeping an eye on the right risks: climate, biodiversity loss, natural disasters and human-made environmental disasters. The question that leaders need to ask is: are these plans applicable to our organisation? What does it take for our organisation to stay competitive?
How can corporate governance continue to evolve, now that we know that global crises are real?
Good corporate governance will withstand the test of time and crises. The evolution of corporate governance will be driven by shareholders as well as stakeholders but should always be anchored by principles of transparency, accountability and sustainability.
How can leaders and management be role models of good governance to their employees in times of crisis?
COVID-19 served as a test for leadership. When times are difficult, functioning boards stand together and trust plays a key role. Board members must bring their best efforts to the table and the board needs strong leadership so that they speak with one voice. At the management level, effective leaders enable managers to make the best decisions they can, keeping in mind a clear set of enterprise priorities, such as keeping employees safe and demonstrating ethical behaviour.