Mourant's Global Perspectives blog provides regular commentary on relevant topics. Here Consultant Geoff Cook gives his views on the impact of Covid-19
Is it only a couple of months since the word 'Corona' conjured up pictures of expensive cigars and Mexican beer? With the addition of just five letters, 'coronavirus' has burst into our lives as the most talked about subject on the planet.
It's a cruel irony that globalisation, the force that saved hundreds of millions from abject poverty and life prematurely cut short by illness, should play such a critical role in the rapid spread of this new pandemic, as world travellers returned home accompanied by a deadly but invisible companion.
There is currently no treatment, and health systems around the world have come under tremendous strain. The search for a vaccine is in overdrive, and meanwhile 'social-distancing' and 'lockdowns' have taken on a new significance in our everyday language, as we rapidly adopt a way of life most of us would never have thought possible.
Much has been made of the way society has adjusted (or not) given the imperative to tackle this new threat.
Early reactions have revealed some fault lines, with supermarket shelves stripped bare, and weekend retreats overrun as a departure from the main centres of infection has seen second homeowners flee.
In Europe and the US, we are now mostly locked away to protect us from ourselves, while Asia has passed the peak of the bell curve, and life is just beginning to normalise.
How will we social animals cope with periods of prolonged isolation? Will we see a new epidemic of depression, or will we take the opportunity to reflect, press the pause button and celebrate the positive impact on climate change?
Tough dilemmas for business
The reaction to the crisis from all sections of society has been significant, and few would argue that business has an important role to play.
Across the business world, continuity plans have been dusted off and re-evaluated. Disaster recovery sites have not been a panacea, moving the problem to another location doesn't help. The difficulty of planning for Black Swan events is in sharp relief.
Working from home (WFH) is the new normal, and building resilience in home – working and remote access has paid handsome dividends for those who were far-sighted enough to 'invest and test' before the crisis.
But Covid-19 asks tougher questions than "Can I continue to operate and serve my customers?", hugely important though that is. Fundamentally, governments around the world and businesses are faced with a dilemma – saving lives or saving livelihoods. But thankfully the choices aren't as binary as they might first appear.
Universally business sees the imperative to put people first, with WFH substantially mitigating the risk from the disease. Prioritising health and wellbeing doesn't just mean minimising the chances of infection. For some, and particularly those with vulnerabilities around disability, or mental health, social isolation in and of itself can be hugely challenging, not to speak of the tremendous stress and worry arising from being let go by the firm that decides to close completely.
The bigger picture
The advance of environmental, social, and governance (ESG) frameworks as a means to express the purpose of business in society could not be more timely. While it is critically important to address all aspects of business operations, operating within the guard rails of a sound ESG policy will ensure the firm doesn't lose sight of the bigger picture.
When purpose, priorities and principles are aligned, they will provide an anchor for the firm that prevents them from being blown off course, and a guide to making the right decisions for themselves and society.
Values breed sound principles, which in turn give rise to sound actions. There will be casualties from this crisis in the business community. Still, they are likely to arise in the ranks of a small minority who seek to exploit the situation for short-term advantage and to put profit before people.
Of course, we must do everything possible to suppress the virus, but while we are, we must act to mitigate the biggest shock to our economic system since the 1930s.
The fall-off in production, sales and general prosperity will be more dramatic than the global financial crisis, from which we are only just recovering a decade later. The reduction in lives lost from disease through responsible action must not come at the price of grave economic harm, leading to a permanent loss of employment as businesses fail beyond viable recovery.
So, what role should business play? The behavioural protocols for slowing and then extinguishing the pandemic are culturally tricky for westerners, but the Asian experience makes their value clear.
Firms encouraging their adoption and observance in Europe and the US will assist in bringing the pandemic under control faster, with significant benefits in damping down the impact on the economy, and allowing the path to normality to be resumed sooner than would otherwise be the case.
On the front foot
IFC financial services businesses developed a great deal of creativity in holding onto talent during the financial crisis. Firms now need to reapply those skills, through flexible remote access home working, keeping parental support responsibilities to the fore, and through providing maximum protection for team members, at home and in the workplace.
IFC firms are well equipped to meet these challenges. With a diverse institutional and UHNW client base located in multiple geographies around the world, safe and reliable remote working – enabling employees to operate securely on the move – has been the norm for many years.
Capacity is robust, cyber protections strengthened, and many firms now have 100% of their workforce digitally enabled for anywhere, anytime working. Add innovations around company law in respect of virtual board meetings, innovative steps to ensure compliance with economic substance requirements, and expertise in the adoption of electronic means of document signing, and the ability to support teams and customers is both comprehensive and reassuring.
IFC firms facilitate the fast and efficient flow of institutional-grade capital around the globe. Their access to capital markets and their trusted carrier status provide a vital contribution to keeping the wheels of trade and investment turning, as the world works through the most significant challenge to life and livelihoods of the last century.