Responsible investors engaging with companies has the greatest potential for impact when focussed on big system-wide economic challenges in which the leadership of major corporates can make a real contribution by aligning their enterprises with global goals and necessary action.
So how might this apply to Coronavirus?
Huge amounts of senior management time is rightly being focussed now on staff bio-security and the immediate economic impacts of the virus. But despite (or even because of) the general economic chaos, corporate Coronavirus Action Plans need to be widened to encompass public health and economic recovery wherever possible to the benefit of investor’s portfolios and the public good.
How can companies help? If you were a corporate leader, what commitments could your investors encourage and support you in making?
1. Ways to support community health and health-care services:
- Time off sick without loss of pay for regular workers, sick pay for temporary or insecure workers: directly if you employ or contract them and by exerting influence on others if you buy services at scale from those who do.
- Reviewing any unhealthy overtime or work cultures that may lower staff resilience
- Staggered working hours to reduce contact and support the care of children and others
- Reducing sick note requirements when doctors have other priorities
- Supporting healthcare volunteering by staff with appropriate skills with paid time off.
2. Ways to support economic resilience:
- Keeping suppliers in business by paying on time and early where possible.
- A strong preference for reduced hours over redundancies in your own operations to minimise further economic aftershocks.
- Preparing your own “coronavirus recovery strategy” for when things get better and to help access additional finance before then.
- Banks acting on government schemes to protect SMEs and devising their own SME support packages where gaps exist.
- Considering postponing mortgage payments or repossessions and leasing payments on capital assets to keep people in their homes and customers in business.
- Paying insurance claims fast (including for other economic impacts like floods, storms and fires).
3. Supporting the IT eco-system: preparing for mass home-working, related security risks and maintaining productivity and communication.
4. Innovating products and services: vaccines and treatments: Pharma companies supporting “open source” science.
5. Serving vulnerable groups: Supermarket providing free deliveries to the over 60s for smaller purchases, for example.
6. Protecting reputation: spotting and blocking anything that might look like exploiting the crisis for short-term gain.
7. Sharing knowledge: exchanging, learning and spreading best practices rapidly across geographies and cultures through you own professional teams and relationships with your stakeholders.
Responsible investors can help encourage and validate responsible governance and leadership from the top: looking longer term; fostering resilience; discouraging sub-optimal behaviour by individual companies or sectors that damage portfolios or the economy as a whole; supporting innovative financing mechanisms. They can do this for the good of their own investments, for their beneficiaries and as responsible economic citizens. And while nobody can “solve” this crisis on their own, responsible investors have a part to play.