10 Steps For Mitigating Coronavirus Risk
This article was created in partnership with Compliance Week and was originally published in the Identifying & Mitigating Coronavirus Risk eBook.
As the coronavirus disease threatens to become a worldwide pandemic, the business ramifications range from a temporary disruption to a virtual halt of operations, writes Aaron Nicodemus.
As the coronavirus outbreak threatens to become a worldwide pandemic, the ramifications for any business can range from a temporary disruption to a virtual halt of operations. The worst-case scenario is mass quarantines, widescale mandated business shutdowns, scores of sick employees, and massive supply chain disruption.
What exactly is a pandemic? The U.S. Centers for Disease Control and Prevention defines a pandemic thusly: “Pandemics happen when new (novel) influenza A viruses emerge which are able to infect people easily and spread from person to person in an efficient and sustained way. Because the virus is new to humans, very few people will have immunity against the pandemic virus, and a vaccine might not be widely available.” The coronavirus has been described as a novel virus. First detected in December 2019 in Wuhan, China, it spread globally to more than 50 countries, sickening more than 100,000 people and killing about 3,200 as of March 6.
Health officials warned that coronavirus outbreaks are likely to occur in the United States. Outbreaks are considered less severe than pandemics, but outbreaks will force local governments to enact procedures that will cause significant disruptions to businesses. Here are 10 steps your business can take to mitigate risks in case of a coronavirus pandemic.
- Follow the advice, warnings, and guidelines issued by federal, state, and local government. In many cases, your business will not have a choice. If a coronavirus outbreak morphs into a pandemic, quarantines will be mandatory, businesses will close, and travel will be restricted or banned in hard-hit areas. Health facilities will be overwhelmed, emergency response times will be slowed. There will be warning signs that such measures are coming, but they may evolve rather quickly. Watch for regular, widespread health alerts coming from local governments and if they start ramping up efforts to control the pandemic.
- Closely monitor the health of employees. In China, this has come to mean checking the temperature of everyone arriving and leaving work and sending anyone with a fever home to a 14-day quarantine. That may seem extreme, but clearly, sick employees should stay home. Stress prevention measures like hand-washing and good hygiene. If the local healthcare system becomes overwhelmed, ramp up employee access to third-party doctors or telemedicine. Employees should learn a protective mask can prevent a sick person from infecting someone else, but will likely not prevent a healthy person from getting sick.
- Establish a pandemic preparedness plan. If your office or workplace can work completely remotely, establish a plan to do so. If that is not possible, identify key employees who need to be at the workplace and establish a schedule where they come into physical contact with as few coworkers as possible. Limit visits to the workplace by vendors and suppliers. Establish a policy for deliveries to be made to the workplace without employees coming into contact with delivery drivers. Prepare to operate workplaces with a skeleton staff, where most everyone works from home but a few employees rotate into the office on a weekly basis.
- Communicate, communicate, communicate. Keeping employees up to date on emerging threats— and the company’s response—is of the utmost importance. Spin up your company’s crisis communications now—even though the outbreak is not yet a crisis, advised James Green, director of Risk Advisory Services at SAI Global. An informed employee is much less likely to panic and overreact. Employees should be encouraged to watch for signs of sickness in themselves and fellow co-workers and know to whom they should report their concerns.
- Convey financial risks posed by the coronavirus. With disruptions to supply chains and offices, stores, and businesses shut down, there are real threats to a company’s bottom line in the short and long term. Public companies need to convey these risks to shareholders and regulators.
- Plan for major supply chain disruptions. In response to the growing coronavirus threat to their supply chains, some businesses have taken steps to reduce their production capacity by 5-10 percent for the next few months, and delay shipments of product by weeks or months, said Green. “Companies should be prioritizing delivery to customers based on revenue and relationships,” he said.
- Re-examine coronavirus risks associated with third-party suppliers. In addition to the usual risks, analysts should look at risks associated with the countries their suppliers operate in, and those risks should be continuously monitored and updated, said Brian Alster, general manager of third-party risk & compliance at Dun & Bradstreet. If at all possible, start searching for alternative sources for critical components in your supply chain, he said.
- Be prepared for travel bans. China currently has a mandatory 14-day quarantine on all visitors entering China, according to Kent Kedl, a partner with Control Risks, a global risk consultant group. Quarantines and travel bans in South Korea and Italy are similarly snarling business travel. Some companies have chosen to ban employee travel to regions hardest hit by the outbreak. Travel bans may upend plans for conferences scheduled for the next 3-6 months, especially those with attendees traveling from abroad.
- Expect international consumer markets to be hit—hard. Already, China’s huge appetite for consumer goods has taken a demonstrable hit, only three months into the coronavirus crisis. Expect that it will get worse before it gets better. And the coronavirus’ effect on consumer markets in other Asian countries, and perhaps even Europe and the Middle East, are as yet unknown and unpredictable.
- Keep an eye on deliveries. E-commerce and manufacturing firms should be concerned they won’t be able to ship products to and from China if there’s a pandemic. The delivery industry in China is robust and healthy, perhaps even buoyed by the crisis, according to Kedl and a recent story in the New York Times. Anecdotally, everyone in China is having food delivered to their homes, Kedl said. But delivery employees are putting themselves at risk by doing deliveries. If they start getting sick, an entire lifeline to the quarantined vanishes inside China, and companies that depend on rapid and regular deliveries face a huge problem.