By Clayton Hickey, Clayton HickeyAudit and Assurance Partner
30 April 2020
The COVID-19 outbreak has created a raft of new challenges and issues which most Business Continuity Plans would never have contemplated in their wildest dreams. There is no established playbook for continuity with this type of issue. Previous economic slowdowns have had the effect of slowing activity, whereas with this one, has brought entire parts of the economy to a grinding halt. There could be more to come. These are different times.
Our team has been working with clients over the last four weeks to ensure that their Continuity Plans place them in the strongest position by comprising a Pandemic Response and Emergency Response Plan. Insurers and in particular financiers, are increasingly making enquiry of business to ensure that they have specific Pandemic related plans in place to address not only the unique risks posed by COVID-19, but to also address the risk of any further pandemic related events into the future. This could become a mandated part of doing business in the future.
What does a Pandemic Plan response include?
- Additional employee safety protocols: Our workforces are increasingly being required to work from home; some are still working out on sites and potentially exposing themselves. The importance of ensuring that the mental health impacts are monitored and supported is now more important than ever.
- Infection plan: This is a big one. Third parties such as insurers, financiers, and critical contractors will expect that you have a very clear decision tree of the steps that must be undertaken if someone becomes infected. If infection occurs in a key factory, it is likely your factory will need to be closed and cleaned, and workers tested. A COVID-19 clean is not something your local cleaner will be able nor accredited to do – it is becoming increasingly clear that this type of clean is undertaken by only a few, is expensive, and takes time. These cleaners are going to be very busy. On that basis, when will your factory be back up running and what does that mean for your continuity of operations and cash flow? A clear infection plan and decision tree will manage these issues.
- Workers in remote locations: Having clear plans to be able to extradite people immediately from their worksite and if necessary, to hospital, will be critical.
- Contractors and third parties: While we are busy ensuring we are COVID-19 ready, are your contractors and third parties as ready as you? Are they exposing your organisation to a pandemic risk by not having sufficiently robust protocol in place? Additional checks and balances will be required in order to assess this and support the continued continuity of your operations.
- Outsourced arrangements: Have you identified business critical functions and isolated where these are outsourced? Do you have a plan if the outsourced arrangement all of a sudden becomes unavailable? Routine matters such as outsourcing of payroll are often over-looked but can cause big issues if they suddenly stop functioning without a backup plan.
- Key person dependency: Have you identified all business-critical functions and made sure there is a person who has been appropriately trained and informed to “act up” if the key person becomes unavailable?
- Insurance: What does your continuity cover say? Does it contemplate a matter such as this? Do not count on it doing so, and make sure this is checked.
This is but only a few of literally hundreds of permutations of matters that need to be considered in the conditions of a pandemic.
Traditional continuity and response plans will be in urgent need of review.