Coronavirus Disease of 2019 (also known as “COVID-19”) is, at the time of this writing, a matter of global concern. Emerging in Wuhan, China in late 2019, the disease has spread rapidly and presents a threat to businesses worldwide and the global economy as a whole.
Basic Facts About COVID-19
- Human-to-human transmission is via airborne droplets resulting from coughing by infected individuals.
- If these droplets land on a surface, the virus can survive on the surface from a few hours up to several days.
- Symptoms of COVID-19 include fever, fatigue, dry cough, sneezing, runny nose, sore throat, and shortness of breath, among others.
- Roughly 80% of those infected recover from the disease without requiring special medical care.
- Those most at risk for developing critical cases of COVID-19 are young children, the elderly, and those with pre-existing medical conditions.
- As COVID-19 is a viral infection, antibiotics are not an effective remedy.
- Though research is underway, there is presently no vaccine against the COVID-19 virus.
- At the time of this writing, there are over 83,000 global cases of COVID-19, with 2800 of them being fatal.
- While cases of COVID-19 are presently concentrated in Asia, experts assert that it will inevitably spread into the US.
Risks, Details & Mitigants
COVID-19 has the potential to impact US & international businesses in a variety of ways–some milder and some more severe. For each impact, however, businesses have the opportunity be proactive and take steps to manage risk before it affects their business. What follows is a non-exhaustive list of the ways in which businesses may be affected, and how the effective deployment of risk management protocols and techniques may mitigate or prevent adverse consequences:
RISK: COVID-19 spreads into your country / countries of operation, and attempts to contain the outbreak cause disruptions to daily life.
DETAILS: Disruptions may include shutdowns of public transportation, shortages of foodstuffs and other living necessities, overload at medical treatment facilities causing delays in access to care, etc.
MITIGANTS: Businesses should develop full continuity plans, including deploying remote working capabilities for all critical employees when possible. These plans should also include stepped-up procedures for office cleanliness, including the deployment of supplementary cleaning products and services throughout their facilities. Businesses should furthermore advise employees to prepare for disruptions by maintaining supplies of non-perishable food and sterilization products (e.g., hand sanitizer, cleaning solutions or wipes, etc.) at their homes. Businesses should likewise inquire with their health insurance providers as to whether their plans include some form of “virtual doctor’s appointment” or other such capabilities, and consider putting such a capability in place via a third-party vendor if no such option is provided by their insurance provider.
RISK: One or more of your employees become infected with COVID-19.
MITIGANTS: In addition to sick leave, businesses should deploy remote-working capabilities whenever possible. Furthermore, and in accordance with their business continuity planning endeavors, businesses should inventory critical tasks and upcoming deadlines along with the employee assigned primary responsibility over the task or deadline, and further designate one or more employees as secondary coverage if the primarily responsible employee becomes ill.
RISK: One or more third-parties fails to meet one or more commitments owing to disruptions related to COVID-19.
DETAILS: Even if your own business goes unaffected by COVID-19, other individuals or entities on whom / which your business relies may be adversely affected. Whether it’s a client, vendor, or some other third-party, a disruption in their locality or spread of infection within their business may adversely affect their ability to render service or meet commitments to your business.
MITIGANT: Enacting high-level third-party risk management—a specialized subset of overall business risk management—is a crucial element of creating operational resiliency within businesses during times of uncertainty and potential instability.
RISK: Shipping concerns disrupt national / international supply chain.
DETAILS: While global health authorities have represented that there is relatively low risk of COVID-19 infection from exposure to ordinary commercial goods shipped from jurisdictions where COVID-19 is present, global supply chains may nevertheless be disrupted by interruptions of an ordinary business environment for source countries and at other critical shipping locations.
MITIGANT: While the potential for and locations of disruption(s) are difficult to predict, businesses may implement various supply chain resiliency techniques to ensure that their own ability to do business is less affected by global disruptions.
RISK: Business travel destination(s) become affected by COVID-19 outbreak(s).
DETAILS: China—a major business travel destination by professionals in a variety of fields—is the epicenter of the global COVID-19 outbreak. However, other countries, such as South Korea, Japan, Italy and Iran, have recorded significant rates of infection at the time of this writing. Cases have been reported on every continent with the exception of Antarctica, and expects predict that, at the time of this writing, infection rates will continue to rise globally in the near-term.
MITIGANTS: Throughout the course of the COVID-19 pandemic, businesses should avoid employee travel to high-risk areas at all costs. Before any upcoming business travel, businesses should check the COVID-19 status of destination countries on health authority websites, such as the CDC’s Travelers’ Health site. Where possible, businesses should arrange for teleconference or video-teleconference capabilities to be on-hand in case of cancellation of business travel due to COVID-19-related risk.
RISK: The global economy undergoes recession as a result of COVID-19.
DETAILS: Many economists, including Mohamed El-Erian and Nouriel Roubini, are predicting that a sustained global recession may loom large due to the potential effects of the global COVID-19 pandemic. While a rate cut by the US Fed may be a near-term possibility, it would do little to right the fundamental issues behind the COVID-19-fuelled pullback across global markets, according to Tom Porcelli (Chief US Economist at RBC Capital Markets).
MITIGANT: Finance teams within businesses must anticipate and plan for the impact of an increasingly possible global recession in 2020 as a result of COVID-19.
For more information on how businesses can become more resilient to the threats posed by the COVID-19 pandemic, don’t hesitate to contact us via e-mail or via the form below.
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