The latest news headlines about the pandemic and its impact on employees, organizations, and governments.
May 8, 2020
Trust in government and in government leaders has surged past that of private companies and CEOS since January, according to a survey with more than 13,200 respondents in 11 markets around the world conducted by global communications firm Edelman. "This is a stunning turnaround for government which has always languished at or near the bottom of the trust hierarchy," said Edelman CEO Richard Edelman. Respondents said business was either doing poorly, mediocre, or completely failing at putting people before profits (50%), implementing safety measures to protect workers and customers (41%), and helping smaller suppliers and business customers stay in business (46%). Most respondents favored a cautious approach to reopening the economy and businesses, with 75% wanting CEOs to be conservative when getting back to normal operations, even if it means waiting longer to reopen workplaces. A majority of respondents (68%) wanted CEOs to proactively engage in conversations with government to protect people and the planet, while maintaining the flexibility to innovate, respond to a crisis, and meet growing needs for products and services.
According to the UN Office on Drugs and Crime (UNODC), the COVID-19 pandemic is having a significant effect on human trafficking victims. "With COVID-19 restricting movement, diverting law enforcement resources, and reducing social and public services, human trafficking victims have even less chance of escape and finding help", said Ghada Fathi Waly, the UNODC executive director. Many experts also anticipate human trafficking cases to rise as schools remain closed and children are forced onto the streets to search for food and money. School meals are often a child's only reliable source of nutrition, and with the UN reporting that 370 million students worldwide are now missing out on them, this leaves an opening for organized crime. "Traffickers may become more active and prey on people who are even more vulnerable than before," said Ilias Chatzis, chief of UNODC's Human Trafficking Section. UNODC continues to monitor the situation and support countries as they provide resources for victims and law enforcement combating this risk.
Data models and technology solutions that provide data are in plentiful supply and have been enormously important in fighting the pandemic. However, just as in any business context, data is only good if it is accurate, vetted, and responsible. In the Wild West of emerging data resources, some sources may be incomplete, incorrect, overly specific, or lack context, warns an article in the Harvard Business Review (paywall). Consumers of data and data technology tools such as businesses, public sector organizations, and governments should look for the following characteristics: transparency, collaboration, rigor, and expertise. The stakes are high as the consequences of data interpretation can have far-reaching effects.
As companies think through various return-to-the-workplace scenarios during the COVID-19 pandemic, boards and management teams are also navigating the potential — and highly likely — second wave of illnesses that will hit employees, executives, and board members, according to a report in Agenda (paywall). The consequences of the waves of illness will be extensive and raise workforce matters that CEOs and board members will have to think through, said Laszlo Bock, founder and CEO of the human resources firm Humu and former senior vice president of people operations at Google. Internal audit should work closely with management to as companies reopen their workplaces.
May 7, 2020
The U.S. private sector cut 20.2 million jobs in April, according to the ADP National Employment Report. The service sector lost 16 million jobs, while manufacturing jobs fell by 4 million. National Public Radio reports that more than 30 million people have filed for unemployment benefits in the U.S., and the upcoming federal government jobs report is expected to put the unemployment rate at 16%. Internal auditors should advise management and the board about how high unemployment may continue to impact consumer and business-to-business spending.
The U.S. Senate is divided over a proposal to protect employers from lawsuits brought by employees and customers who contract the coronavirus after businesses reopen, Reuters reports. Republicans and business groups are seeking liability protection, while Democrats and other opponents argue that such lawsuits would be less likely if the federal government set clear safety standards for businesses. Even so, some opponents say they would favor "limited immunity" for businesses that take appropriate steps to protect employees. Internal auditors should research current government guidance on employee and customer safety and advise management and the board of the litigation risks the organization may face.
There was a 272% increase in bonds issued in April to support environmental, social, and governance (ESG) initiatives compared to April 2019, InvestmentNews reports. Although the $48.5 billion in ESG bonds is a tiny proportion of the $50 trillion global bond market, analysts say there is growing investor interest in them. According to Morgan Stanley, social bonds made up $12.4 billion of the total, much of them connected to fighting COVID-19; this subcategory didn't exist in April 2019. Internal auditors should advise management and the board of the growing investor interest in ESG bonds and whether such debt vehicles could be useful in supporting the organization's ESG initiatives.
In a press conference Wednesday, the World Health Organization (WHO) warned that the world should not go back to business as usual. WHO Director General Tedros Adhanom Ghebreyesus urged caution to countries easing social distancing restrictions, especially as reported cases are increasing in Eastern Europe, Africa, Southeast Asia, the Eastern Mediterranean, and the Americas. According to this CNBC article, some U.S. states are beginning to reopen despite models suggesting it will lead to a rise in the number of COVID-19 cases and deaths. As these restrictions lift, what's certain is that the global health crisis has permanently altered how workplaces will operate, according to this Business Insider article. Many companies are focusing efforts more on short-term reentry and social distancing measures will be a must. Many companies don't have the capital to support major overhauls, so firms are looking at various options to hack or DIY existing spaces.
Job losses in the early stages of the COVID-19 outbreak were concentrated among workers unable to work from home — jobs that typically involve interactions with people. The option to work from home may become a financial lifeline for workers during the coming downturn, especially among those who are college educated. According to this article from the Pew Research Center, in February, 62% of workers with a bachelor's degree or more education had jobs that could be done remotely — double the number of workers who completed some college education (33%) and triple the number of high school graduates who did not go to college (22%). The Congressional Budget Office projects job losses of nearly 27 million in the coming months, nine times the loss from February to March. As the downturn nears its trough, there are signs that the ability to work remotely will offer less protection.
May 6, 2020
The COVID-19 pandemic has upended life in many ways, including pushing many companies into new remote work arrangements. This global work-from-home experiment could permanently change the way many companies view office life. A recent survey of 1,200 remote workers, half of whom had never previously been allowed to work from home, revealed that 43 percent would like to work from home more of the time, even after the threat of the disease has passed. As far as how employers are reacting, 20 percent of respondents said they were aware their company was actively discussing a new remote work policy, 26 percent said they were optimistic their company would offer more flexibility going forward, and 20 percent said their employer already had a remote work policy in place. Only 31 percent said their company did not have a flexible policy and did not expect that to change. According to the survey, participants cited not having to commute, enjoying a more flexible schedule, and being more productive as the top three reasons for wanting to work remotely.
Whistleblowers may play a key role in assuring accountability during the continuing COVID-19 pandemic crisis and recovery. A Forbes article explores a growing argument that legislation is needed to support whistleblowers and encourage organizations to see them as a "compliance tool" with "economic as well as social benefits," rather than as "enemies or traitors." The article's sources describe replacing the paradigm of blaming with "one of an opportunity to learn."
Following the release of guidance that provides recommendations for when a worker can resume normal work functions, the Centers for Disease Control (CDC) has continually updated the document based on new information. Although the guidance is designed for health-care workers, the information is broadly applicable across the workplace spectrum. One notable update extends the duration of exclusion from work to at least 10 days since symptoms first appeared. According to the CDC, this decision was "made based on evidence suggesting a longer duration of cultural viral shedding and will be revised as additional evidence becomes available." Additionally, it is recommended at least three days (72 hours) pass following recovery before resuming work, with recovery defined as "resolution of fever without the use of fever-reducing medications and improvement in respiratory symptoms (e.g., cough, shortness of breath)."
As more states begin to ease COVID-19-related stay-at-home restrictions, organizations are beginning to plan return-to-work strategies for their employees. The global real estate firm Cushman & Wakefield has launched an online site with helpful tips for making the transition. The website includes a "safe six" list that provides checklists for preparing the building and workforce for resuming regular activities, controlling access, reducing touch points, effective communications, and developing a social distancing plan. It also offers industry-specific checklists for retail and warehouse operations. A return-to-work guide, Recovery Readiness: A How-to Guide for Reopening Your Workplace, is available for download, as well.
The ongoing COVID-19 pandemic has brought privacy and surveillance concerns to the forefront — from hacked video conferencing sessions to proposed government tracking of people's cellphones as a containment measure. The Pew Research Center surveyed Americans on their views related to privacy, personal data, and digital surveillance. Among the survey's key findings, six-in-10 of those polled think location tracking will not make much difference in limiting the spread of COVID-19. Internal auditors need to be aware of privacy concerns as they work with their organizations in responding to the pandemic, including issues involved in reopening offices.
May 5, 2020
While the global pandemic has been a shock to businesses big and small, it also has provided valuable lessons to CEOs that can better prepare them for future disruptions. Chief Executive outlines seven critical take aways from the crisis that are valuable to risk management and continuity planning — from focusing on supply chains to quantifying risk to planning for shutdowns. Internal audit can provide assurance in these areas, which can help build a more resilient business.
As many states begin to reopen businesses, most U.S. consumers have little or no interest in going out to shops and restaurants, according to a PYMNTS.com study. Most say it will take at least seven months for them to resume normal consumer activities. Despite the open signs in storefronts, a draft U.S. government report forecasts that COVID-19 cases will increase to 200,000 a day by June 1, with more than 3,000 deaths daily, The Washington Post reports. Internal auditors should caution management that retail and restaurant sales may be slow for several months until consumers feel it is safe to venture outside.
Apple and Google warn that mobile apps that notify people about exposure to the coronavirus must not record location data from cellular networks, NBC News reports. The move is a response to concerns that contact-tracing apps, which use Bluetooth to record when phones are near each other, could violate privacy. Apps using location data have proven effective in countries such as China and South Korea, a Fast Company article notes. In addition to privacy, internal auditors whose companies are developing such apps or are installing them on employees' phones should be aware that apps based on Apple and Google's application programming interfaces could lose functionality if they don't adhere to the rule.
Even when the world is not faced with a crisis, succession planning can be a challenge. The median age of S&P 500 CEOs is 58, putting them at higher risk of COVID-19-related illnesses, and making it more important than ever to have a plan — even an interim plan — in place. Fifty-three percent of respondents in countries hardest hit by the pandemic do not have a contingency plan for CEO succession, according to research from a global survey of 5,000 board directors in the Harvard Business Review. Researchers recommend steps boards can take in contingency planning that address short-term plans, long-term plans, existing plans, and critical roles.
May 4, 2020
To lower the risk of spreading coronavirus among patients and staff in medical treatment facilities, doctors and dentists began postponing or canceling elective surgeries in mid-March. Patients also began to avoid medical services amid stay-at-home orders. "The result was that health-care spending declined at an annualized rate of 18 percent in the first three months of the year, according to Commerce Department data released last week, the largest reduction since the government started keeping records in 1959," states a Washington Post article, which explores the pandemic's long-term impacts on the health-care sector. Health economists predict new constraints on health-care delivery that may reduce profitability.
While companies that had previously experienced natural disasters may have had short-term crisis plans in place, surveys conducted by EY, Boardlist, and other organizations show that many boards and executives had not done much planning for a major risk event prior to the pandemic. Surveys showed that as many as half of public and private companies did not have a crisis communication plan – and that even in March, only a minority of directors had reviewed management's plan for minimizing supply chain disruptions, according to a Bloomberg Law article. Moreover, only 20 percent of companies reported that they "very frequently" conducted disaster simulation exercises, stress testing, or scenario analyses. According to the article, going forward, boards are likely to focus more on contingency planning for major risks.
Even as COVID-19 deaths mount at factories in Mexico, the U.S. is sending the message that it's time for those that have ceased production to get back to work. The U.S. government, along with more than 300 American CEOs, has mounted a campaign to persuade Mexico to reopen many factories that were closed because of the country's social distancing guidelines, warning that the supply chain of the North American free-trade zone could be permanently crippled if factories don't resume production soon. Internal audit can assist their companies in evaluating supply chain risks, as well as environmental and health risks as factories reopen.
Air travel after the COVID-19 pandemic will look and feel a lot different from flying in the pre-pandemic world, according to Axios. In the post-pandemic world, expect everything to take longer and expect new procedures for everything from luggage check-in to security clearance and boarding. In a report, aviation marketing consultant SimpliFlying predicts features such as health screenings, "disinfection tunnels," and individual boarding notifications.