March 27, 2020
The Secretary General of the Organisation for Economic Co-operation and Development (OECD) is calling for stronger coordination among nations in the battle to eradicate the coronavirus (COVID-19) and manage its global economic impacts. In an
open letter posted on a new OECD COVID-19 website, Angel Gurría identifies four areas — fighting the pandemic, strategic approaches, financial regulation and supervision, and restoring market confidence — where stronger coordination and cooperation will help speed the medical and economic recoveries. The new website will include "… information on policy responses in countries around the world, together with OECD advice, in some cases. We will also be releasing a series of policy briefs on a range of subjects in the context of the COVID-19 crisis: on vaccines, taxes, education, SMEs, etc.," according the Gurría letter.
The role of human resources (HR) is increasingly seen as crucial to a company's success, and this distinction may be even more pronounced during the COVID-19 outbreak. According to an
Economist (paywall), HR departments can help organizations navigate the pandemic in the following ways: helping a newly digital workforce obtain necessary equipment, monitoring employee morale, adapting leave policies to allow for challenges faced by caregivers or people who fall ill, and determining what tasks can be automated or even who can be redeployed or reskilled to avoid layoffs. Internal auditors should consider partnering with HR chiefs to monitor data related to culture and talent management risk.
As COVID-19 continues to spread worldwide, companies face questions about disclosing whether their CEO or other key executives have been exposed. They also must consider whether to disclose when a key executive is quarantined, especially if the quarantine inhibits the executive's ability to perform leadership functions. Internal audit can assist firms by assessing risks related to compliance and crisis management as appropriate.
Safety professionals can play a
key role in helping organizations protect their workers, communicate accurately and effectively about the risks, and ensure business continuity as the COVID-19 pandemic causes disruption worldwide. Environmental, health, and safety internal auditors can assist management in ensuring that all steps have been taken to protect the health of employees and their families, communicate information to them, and ensure the organization is able to weather disruptions caused by the pandemic.
Many organizations have either shut down entirely during this time of crisis or have implemented telecommuting models, but ones that have been deemed essential businesses by their state continue to operate largely as normal. This presents significant health and safety risks to both on-site employees and visitors. An
article issued by
Occupational Health and Safety outlines a few best practices organizations can implement immediately to ensure virus exposure is kept to a minimum within their workforce, and ensure the virus is properly contained in the event it is discovered. Internal auditors should be knowledgeable about what such practices are, as well as play a critical role in assessing the effectiveness of the guidelines put in place by their organization.
As stock prices reach historic lows in the wake of COVID-19's market sell-off, record numbers of corporate boards have voted to adopt "poison pills." By authorizing companies to sell new stock to their shareholders at a discount, this short-term emergency measure aims to prevent activist shareholders, corporate rivals, and hedge funds from amassing ownership stakes above a certain threshold. In this
Agenda article (paywall), experts discuss the delicate balance of reputational risks that targeted companies, institutional investors, and activists alike are considering in an environment where all parties may rush to settle.
March 26, 2020
Enterprise Risk Management (ERM) is a proven process for managing the complex set of risks that organizations of all stripes face. North Carolina State University's Mark Beasley, KPMG professor and director of the ERM Initiative in the Poole College of Management, recently shared his thoughts on
applying ERM core principles to managing risks associated with COVID-19. In a video and supporting article, Beasley outlines how key ERM concepts provide a framework to prioritize and respond to pandemic-related risks. He also provides tips to manage those risks today and after the threat of the pandemic subsides.
Switching rapidly to a remote work environment means keeping employee engagement top of mind, chief information officers (CIOs) tell
CMSWire. This includes ensuring employees have the technology they need and the network capacity to support them. Another concern is keeping employees from using their own laptops, webcams, applications, and other devices to fill technology gaps. Internal auditors should consider employee engagement in reviewing how business continuity plans support remote work.
Corporate leaders know they'll need to cut costs to manage the economic effects of COVID-19, but are layoffs inevitable? The authors of this Harvard Business Review
article recommend that leaders be "utterly clear" and specific with employees about the company's financial health and invite them into the conversation. Internal auditors can help guide the C-suite and the board to make decisions that prioritize long-term resilience over easy short-term cost-cutting.
In this time of remote work, organizations need to maximize idea flow, an
MIT Sloan Management Review
article notes. In the absence of in-person interactions — which can account for half of decision quality — organizations need to assess whether these conversations still are happening digitally. Internal auditors and their organizations can use tools to measure the organization's teleconference, phone, and email pathways. Such tools can produce a graph of idea flow that shows which teams and employees are connected and identifies bottlenecks.
A new survey by the National Research Group provides important insights into how workers view telecommuting from a generational perspective. For example, the survey data suggest younger workers (18-24 years old) may be struggling to remain focused and productive. These and other survey findings could help organizations understand how different age groups are coping with working from home. Internal audit can leverage such data to support their organizations' efforts to manage, measure, and modify remote workforce policies and processes.
March 25, 2020
Internal auditors should keep a close eye on their organizations' social media regarding the pandemic, even those posts designed to provide comfort to customers and shareholders.
The Wall Street Journal reported this week that those posts may not be having their intended effects. According to the
article (paywall), marketing and communications experts say the wave of feel-good emails may be boosting anxiety. This, in turn, is leading some to unsubscribe from email lists altogether.
While data protection authorities across Europe agree that only "essential" information should be collected and shared, there are varying levels of acceptance about what that means. A Compliance Week
article says this lack of consistency could lead to confusion for organizations wondering how they could ask relevant health-related questions without breaching the General Data Privacy Regulation (GDPR) and other privacy legislation. In response, the European Data Protection Board issued a statement on March 20 clarifying how personal data could be used by companies during this global emergency. In these extenuating circumstances, the Statement on the Processing of Personal Data in the Context of the COVID-19 Outbreak can help internal auditors navigate their organization's compliance with GDPR.
According to an NBC
article, companies are voluntarily mobilizing against COVID-19 in ways that have not been seen since World War II, pivoting their business models in the process. For example, manufacturers are collaborating with ventilator manufacturers, liquor and luxury goods manufacturers alike are converting production lines to manufacture hand sanitizers, and even tech companies are in talks to share location data with the government to enable improved disease tracking. As such collaboration and mobilization expands companies into waters largely unknown, internal audit will play an even more vital role in providing assurance to board members and assessing all the risks such a rapid transition entails.
For companies who have moved their workforces online, it may be worth reminding employees that "a general paranoia of email is healthy," says one expert. Phishing attacks have increased 72% from January to March, during a time when employees have been forced to work remotely and IT systems are stressed. A report from
ABC News says criminals are exploiting the coronavirus pandemic, targeting workers who are new to working from home, are distracted, and multi-tasking, sending fake emails and creating fake sites that replicate teleconferencing platforms
A special edition of the annual Trust Barometer Report issued by the communications firm Edelman underscores the important role that businesses have in providing credible information during the COVID-19 crisis. The
report found that mainstream news organizations are the most relied-upon source of information. However, it also found that employees said their employer was by a wide range the most credible source of information over other businesses and organizations, as well as government and the media. Internal auditors have an important role in guiding the C-suite and board in providing information to their employees and the public.
Freight carriers are struggling to deliver goods by land, sea, or air as government-mandated lockdowns related to the COVID-19 pandemic disrupt global supply chains and threaten the delivery of medicines and other vital products. According to an
article from Reuters, problems include too few truck drivers, shortages of ship crews, insufficient air freight capacity, as well as increased border controls. Internal audit can assist the C-suite, board, and management in responding to these disruptions and developing viable solutions.