Best Practices for Companies in Response to the Coronavirus Crisis
The Coronavirus has arrived in Mexico. While the number of reported cases (82 as of this morning) remains small, the growth is exponential and will be in the thousands very shortly, with first deaths imminent. Given the lack of available testing, the actual number of cases in Mexico is most likely much higher than the reported numbers. On March 1st Spain had just 84 reported cases, and now, 17 days later, has reported 9,942 cases, and 510 deaths. Mexico’s (already underfunded and inadequate) health care system is sure to come under severe strain.
By now, a majority of large companies in Mexico have developed crisis management plans, facilitated home office when possible, and most responsible employees are minimizing contact with those outside their immediate family. Such measures will help reduce the infection rate, and thus slow growth, although come at a huge but necessary financial and economic cost.
What is there to do from an IR perspective? First, it’s important to stay in contact with analysts and investors and keep them apprised of any key developments. With many people working from home, it’s useful to have phones redirected to mobiles, and be on email and chat all the time. To the extent possible, we recommend someone from IR is briefed daily by senior management on the company’s crisis preparations and news. Second, we recommend releasing press releases updating on any developments (same store sales, profits, credit lines) to the extent that such information helps investors understand what is going on, and if possible reassure them about profitability, liquidity and solvency. There is not much use in speculating about the long-term future, as no one knows how long this will last, but showing how you are doing so far can help. Third, to the extent possible, we recommend postponing new initiatives that are not related to combatting the current crisis, as they will be ignored and may send the wrong signal.
We’ve taken a look at recent articles on the subject and attach links below for those interested.
The main findings were:
- Establish a COVID-19 monitoring/response team and write frequent reports to be distributed throughout senior management. The team should consist of 5-7 members, one of which from the leadership level and one with contact with IR team.
- Virtual meetings should be scheduled as often as possible to assure stakeholders of any future changes the company is undertakings.
- Communicate regularly with customers/investors.
- Publish and distribute the company’s protocol/response to the situation.
- Have an alert system set up to adapt to any significant changes.
- Utilize as many communication channels as possible.
- Establish a procedure for shareholders to ask questions via telephone/online.
- Post common questions received online and through the phone with a transparent and honest response.
- Communicate with employees. Have a feedback system in place so employees can address and improve current protocol. Communicate at least once a day.
- Assist epidemic-limiting initiatives in any way possible and publish efforts so customers and other companies can see.
References:
Title: Communicating Through the Coronavirus Crisis
Author: Paul A. Argenti
Date: 13/03/2020 Source: Harvard Business Review
Link: https://hbr.org/2020/03/communicating-through-the-coronavirus-crisis
Title: Issuers explore virtual shareholder meetings amid Covid-19 uncertainty
Author: Zsuzsanna Szabo
Date: 13/03/2020 Source: IR Magazine
Title: A CEO plan for Coronavirus: Actions to Take Now
Author: Tom Holland, Simon Henderson and David Schannon
Date: 13/03/2020 Source: Bain & Company
Link: https://www.bain.com/insights/ceo-plan-for-coronavirus-actions-to-take-now/
Title: Five Ways PR Pros Can Deal with Coronavirus Fallout
Author: Nicole Schuman
Date: 02/03/2020 Source: PR News
Link: https://www.prnewsonline.com/pr-crisis-coronavirus-fallout/
