Hersh Shah, a Commerce Graduate from Mumbai University (HR College of Commerce & Economics), is a member of the Institute of Chartered Accountants of India (ICAI) and an alumnus of IIM – Bangalore. He is a Technical Specialist elected by the Institute of Risk Management, UK. He has over a decade of experience in audit and assurance, risk management, consulting and corporate finance, including structuring of strategic alliances & partnerships with a specific focus in the education sector.
The onset of COVID-19 has changed the views that were consistently rising universal prosperity, and constancy is permanent fixtures of contemporary societies. Throughout history, businesses and risk managers have learned new lessons about how to combat challenges from each of the unanticipated events that have occurred.
A contagious disease pandemic is a far more significant threat to humanity than people ever thought. Could a sharper focus on uncertainty have made us more risk ready? Despite humanity’s scientific and technological expertise and the immeasurable resources at our combined disposal, COVID-19 has frozen the usual ways of existence and reversed our economic growth.
Considering threats like COVID-19, certain businesses that stand prepared to overcome the challenges head-on have a higher survival and recovery rate. This applies to companies in not just remote or low-connectivity locations, but any business in the world. Because of the outbreak, travel and tourism, other business operations world-wide are already considerably impacted.
As we continue our fight with COVID-19 across the globe, we are confronted with the paradox of studying the past, to prepare for uncertainty and unexpected events in the future. At times like these, we must cultivate principles, tools, and techniques of risk management, business continuity, and crisis response that can be deployed to assist organisations in preparing and responding to situations like this.
Below are a top 7 takeaways about mitigating risks from the pandemic:
Crisis mitigation: To be insured from unexpected risks in the future, it is wiser to establish a crisis management team. Proceed by deciding what authority it would have and what if the select members become ill or are unavailable due to a reason. Request all departments to review and refresh their continuity plans as required and necessary. Take note of any value statements the organisation may have put together that should guide your response and communications in challenging times.
Safeguarding the employees: For any organisation, its employees are the most valued resources. It is essential to conduct and regularly review risk assessments to ensure a safe place of work for employees and contractors. Make a note and follow all the health and travel advice laid out by the government. Know about the staff that is at higher risk because of pre-existing health conditions and take action accordingly. Lay-out and implement plans to reduce travel and facilitate working from home for the staff where possible. As an employer, do not neglect to review the impact of incentive elements of remuneration packages.
Risk Rejoinder: It is important first to review the key objectives and priorities from the information at hand. Try to balance ‘business as usual’ while accommodating new demands and changing preferences. Make sure you have considered risk assessment(s) under the impact of COVID-19 or any other risk on your key objectives, formulate and implement response plans. For a fool-proof outcome, carry out a stress test of various set-ups. It is crucial to assess whether you have adequate expertise available, in risk management, supply chain risk management, subject matter and communications. As we move along, be alert to other risks materialising like cyber-attacks. Lastly, be aware of possible opportunities for research and learning that will help in improving processes.
Communications: In times of misinformation doing the rounds in media channels, monitor official advice, review public announcement websites regularly, and beware of fake news. Identify and map out your internal and external key stakeholders, and design a plan for how often you will communicate with them. Think about how you will keep the message consistent while understanding that policies may have to change rapidly alongside keeping your staff informed without being alarmist. Ensure leadership teams are briefed and kept up to date.
Regulatory, Competition Law, and Reporting Considerations: Make sure home working arrangements maintain standards of data protection and IT. Consider anti-trust implications if you think about collaboration with other businesses to secure supplies. Consider how the impact of COVID-19 will be reported in compliance with corporate governance codes, e.g. when reporting on principal risks and uncertainties.
Supply chain disputes: Assess and confirm business continuity plans of critical suppliers. Ensure you have thoroughly mapped your supply chain and talk to your suppliers and to your customers to look at options and alternatives. It is crucial to understand how your contracts work and what entails them, especially force majeure provisions. Maintain safety and traceability standards if alternative suppliers are used. Ensure you have appropriate legal advice from time to time.
Robust cybersecurity and data privacy: Remote access has shaped to be the new normal of work because of the rising trend in work-from-home. To prevent employees from accessing confidential or sensitive information, companies should establish necessary commands or controls, and allow access to select staff members. Advise employees to create stronger passwords and set ground rules keeping in mind the cybersecurity policy of the organisation.
Lastly, ensure regular analysis and examination of liquidity and prepare a response plan accordingly. Stay abreast of the assistance offered by the government in terms of tax relaxations, initiative, or loan moratoriums to be able to make an informed decision.
More About Hersh Shah
Hersh was previously associated with KPMG Risk Consulting, where he worked on many enterprise risk consulting assignments. Hersh was also selected amongst the ‘Top 6’ of the firm as part of the Ideas for Innovation Initiative by the CEO’s Office at KPMG India. He has travelled extensively to South Africa, USA, UK, China and the Middle East for his professional assignments. Post KPMG, Hersh also helped in setting up an entrepreneurship business school in Mumbai. He was also one of the 450 people to be selected in 2014 for a social entrepreneurship train journey across India which helped him decipher rural and semi-urban India. Hersh has trained over 1000+ students across India in the area of risk management since the age of 21. Hersh’s last stint was Founder & Head of ITI Vikas – a microfinance NBFC at The Investment Trust of India Limited where he managed a portfolio of over 100+ crores leading a team of 250+ people across India.