The COVID-19 outbreak poses significant and complex challenges for corporations, non-profits, governments and regulators. The human and financial cost to businesses and financial markets has been dramatic.
. financial statement and MD&A disclosures . going concern assessments . restructuring provisions . impairments of financial and non-financial assets (including goodwill) . fair value measurements . evaluation of subsequent events . loan covenants and modifications . lease modifications . pension obligations . government support
IaS can help address the impact of Covid-19.
Covid-19 and Corporate Governance: IaS can help: . develop and implement mitigating actions and processes to maintain an effective control environment, addressing key reporting and other controls which boards may no longer be able to place reliance on; . consider how reliable and relevant information can be secured on a continuing basis; and . pay attention to capital maintenance, ensuring that sufficient reserves are available when the dividend is paid, not just proposed; and sufficient resources remain to continue to meet the company’s needs.
Government Supports We understand that organizations are grappling with the human and financial impacts of the COVID-19 pandemic. It is also a challenge to access the different government supports and understand their eligibility requirements. We have created a Covid-Assist team to help organizations sort through the options during this uncertain time,
Business Continuity Planning (BCP) IaS works with organizations to create, implement business continuity plans. We assess BCP risks and create a system of prevention and recovery from potential threats. An effective BCP ensures that personnel, operations and assets are protected and can return quickly in the event of a disaster. We can review your plan, then design and implement a BCP simulation.
Disaster Recovery IaS can assess organizations disaster recovery risks and address those risks by designing and implementing remediation plans. Our teams of experts are trained to implement disaster recovery solutions.
Policies & Procedures / Training IaS creates polices and procedures manuals which includes best practices applicable to multiple sectors. Some organizations have developed 60 page documents on how the company, management and employees deal with reopening protocols, given the extreme risk of covid-19. We have extensive resources and information to help employers understand their rights and responsibilities while operating during COVID-19. Employers have obligations to protect workers from hazards in the workplace as set out in the Occupational Health and Safety Acts and its regulations and the directives coming from the Chief Medical Officers of Health. There may also be other government requirements such as Ministry of Labour, Training and Skills Development reporting requirements.
Cash-Flow Management Many business are or will be vulnerable to cash-flow problems arising from the covid-19 outbreak. Sectors such as retail, hotels, airlines, entertainment, tourism, consumer goods and apparel companies will be affected by this severe health and business crisis.
Cash-flow management is critical at this time to ensure there is sufficient liquidity and also that solvency remains intact. A key part of cash-flow management is scenario planning, risk assessment and mitigation tactics to help manage stability and ultimately a return to growth. The risk assessment will include an end-to-end review from the supplier network to the customer base.
IaS has a very experienced team which includes experts in credit risk, treasury/liquidity management, corporate finance and accounting to support management in these trying times. We can undertake a detailed cost analysis to improve an organization's cash-flow. IaS have a team that can help firms negotiate with banks and other lenders on key terms and covenants or advise on other restructuring options.
Regulatory & Employment Requirements In the battle against Coronavirus we have received significant updates from governments and health bodies around the world. Given the updates business owners will be turning their thoughts to ensuring that workplaces are safe for employees currently working and those that will be returning from furlough. Paramount importance must be put on ensuring that the health and safety of employees is protected. We have set out below the guiding principles in this regard.
A Safe Place to Work
Health and safety at work guidelines state that a safe place of work must be provided for employees. Failure to comply with the obligation can result in both civil and criminal liabilities for unwary employers. Although the likes of manufacturing companies will be fully conversant with obligations in this regard the pandemic has brought this into sharp focus for office based businesses as well. Whilst every work place will have its own particular challenges, certain guiding principles apply across the board. They include the following: . Ensuring that a comprehensive risk assessment is conducted (and when completed, recorded in writing) . Special attention to be given to vulnerable employees . Once the risk assessment has been concluded ensuring that the safe system of operation is put into place to mitigate the risk and that employees are fully versed (and trained where appropriate) in same . Conducting regular checks and surveillance to ensure that the employees are complying with policies and procedures.
Covid-19 Specific Issues
Applying the principle that a risk assessment should be the starting point there would appear to be three main areas of risk arising when combating Covid-19:
People – For example ensuring that employees are aware of the symptoms of the virus and both they and their employer can take immediate steps to ensure that infection is contained
Aerosol – An employer must try to contain the threat of the spread of infection by air. Containment can be effected by the following;- social distancing measures being implemented - plexiglas screens being installed - meetings being conducted remotely - limiting numbers accessing certain areas of the workplace at any one time; and - having staff working side by side rather than facing.
Contact – This involves trying to limit exposure to the virus by direct contact. Examples include regular hand washing, deep cleaning of the workplace, no hot-desking, wiping down phones, computers and worktops regularly.
The matters outlined above are examples only of measures that can and should be taken and are not intended to be an exhaustive list. Every employer should take adequate time to assess the risks posed due to the circumstances of its workplace and staff.
Employment Rights Aside from the over-arching requirement to provide a safe place of work there are specific health and safety protections provided for employees in various employment laws and orders. We are already seeing cases where employees are concerned that attending the work place may be dangerous. Occasionally this can result in a ‘Mexican stand-off’ where the employee refuses to attend work and the employer either stops paying the employee or takes the more drastic steps and dismisses them. An employee cannot be treated detrimentally (in other words have pay suspended) “in circumstances of danger which the employee reasonably believed to be serious and imminent and which he could not reasonably have been expected to avert, he left (or proposed to leave) or (while the danger persisted) refused to return to, his place of work or any dangerous part of his place of work”. An employee may be unfairly dismissed when the dismissal arises in the same circumstances as quoted above. It would seem that the risk of contracting Covid-19 is serious in the current climate. Therefore an employer who is deciding whether or not to stop paying or dismiss an employee refusing to attend work would need to demonstrate that it has taken all such steps as are reasonable to ensure that the workplace was safe. If it has not carried out the relevant risk assessment and taken the outline steps outlined above it is putting itself in the firing line for litigation proceedings.