The Governance Response to Covid-19
By Kamla Rampersad de Silva
Chief Executive Officer of the Caribbean Corporate Governance Institute
“Let us be calm, cool, think about each other and work with each other as we engage Covid-19 and the disruption it has brought to our lives,” This was the message from the chairman of the Caribbean Corporate Governance Institute (CCGI) Mr. Nigel Romano to directors and senior managers across the region when the CCGI held its first online session entitled “The Governance Response to Covid-19” on Thursday March 19th, 2020. “I was in Hong Kong during SARS” he said, “we will get through this and we will come out even better.”
This was echoed by Michael Annisette, President General of the SWWTU and the Secretary General of NATUC, in the session. Mr. Annisette was one of several panellists who participated in the online discussion. Other members of the panel included CCGI Director and CEO of the Barbados Stock Exchange, Mr. Marlon Yarde; CCGI Director, CEO of Metro Office and Computer Supplies in Guyana, and Board Member of the Rotary Club of Georgetown Central, Ms. Avia Lindie; and Senior Vice President for People and Culture at Massy, Ms. Julie Avey.
One of the challenges Mr. Annisette had to address recently was a situation where some workers felt that there should be a complete shut down of the entire country. This feeling, he said, was triggered by the circulation of a lot of fake news and misinformation. “Sense prevailed when we presented workers with the scenario of what would happen if police were sent home along with all doctors and nurses and other essential workers. What is needed,” he said, “is the leadership to protect those groups of workers and to let them know that they are valued for what they do and that we have their interests at heart. We need to assure then that we will do all we can to put the proper protocols in to place to ensure that you, and by extension your families, are properly taken care of.”
He was confident, he said, that “if we took that collective approach, we would have the ability to get there.” The former independent senator noted that there is no one response since each company has to determine what is best. He added that quite apart from the health workers, there is need to protect the health and safety of port workers, who have to remain on the job to clear containers for suppliers; supermarket workers and bus drivers, who are all still on the job. He cautioned that boards and management teams should not be focused on any kind of disciplinary action at this time.
An important point made by CCGI Chairman Mr. Romano, was the need for transparency within companies because he said, “bad news does not age well and so efforts must he made to ensure proper communication with all stakeholders.” He also noted that there is a silver lining in terms of environmental impact, as there has been a reduction in carbon emission due to less flying, and factories closing down.
The unprecedented nature of the situation was underscored by Marlon Yarde. Speaking from his office in Barbados he noted that no one is an expert in dealing with a pandemic such as Covid-19, but that everyone has had to develop expertise as quickly as possible. He reminded participants that governance requires that boards maintain a bird’s eye view of their organisations to provide oversight. “The board does not get involved in management and make day to day operational decisions,” he emphasised.
As Mr Yarde explained, the health and safety of workers and customers need to be considered as well as financial impact and liquidity. “As a result, a crisis management plan needs to be in place with contingency arrangements with cross functional teams at the ready.” And while he did not say it, the message was clear, no one can be considered to be indispensable because the virus does not discriminate and any member of the team can contract it if exposed.
He also reminded listed companies of public disclosure requirements that must be met to fulfil regulatory obligations. He noted that requests for extensions to regulatory authorities must be accompanied by an explanation.
Another point made by Mr. Yarde was the holding of Annual Meetings for organisations and especially listed companies. The CCGI held its annual meeting on March 6th, 2020 and a new board successfully installed. However, many other organisations have had to postpone AGMs. Given the unpredictability of Covid-19, Mr. Yarde said boards are in an unprecedented position to determine how to ensure compliance with their rules and regulations while still observing social distancing protocols, or in some cases, the self-isolation required of members. Mr. Yarde explained that listed companies may require amendment of their bye laws and any such changes must meet the requirements of their respective stock exchange.
Julie Avey of Massy said that her board and management team was dealing with the situation by first recognising that there was no right answer. “The managers have to do the things that they deem best at the time that they believe it’s right. So they are being empowered to act with responsibility and alacrity and put employees and customers at the forefront,” she said. Currently the Massy board is looking at responsible decision-making protocols and budget amendments to support the new way of doing things.
“There will be mistakes but we are relying on our values to take us through,” she said. “Even in the scenario planning no one had predicted this, so perfection is not expected but everyone is encouraged to keep going. The stress and anxiety are real. Some of our most senior leaders who have gotten to these positions through having the right answer and knowing what to do all of the time may need the most support because the situation is unprecedented.”
Across in Guyana, with official results of the March 2nd, 2020 General Election still to be pronounced, the sitting government gazetted new powers to some of its Ministers to “restrain, segregate and isolate”, to deal with the Covid-19 threat. This was shared by Avia Lindie. She added that measures include no congregating of more than 10 persons as businesses seek to ensure business continuity. Like Trinidad and Tobago, the Guyanese borders have been closed except for cargo and emergency situations and all schools have been closed for the next few weeks. Lindie explained that not having a government in place and not having budgets mean that the situation is exacerbated but prayed that good sense will prevail, and that these situations will be resolved soon.
Dr Terrence Farrell who was online for the session stated, “all the countries of the region are going into a kind of complete stop with movement of persons in or out of the borders and so all economies are going into a kind of maintenance mode, which translates to a decline in economic activity. Persons who are living from pay check to pay check will be severely affected and so the measures taken in Trinidad & Tobago by the banking system are welcomed.”
The former Deputy Governor of the Central Bank of Trinidad and Tobago who was asked his opinion on containment efforts so far, applauded the Trinidad and Tobago government on actions to date. “As the virus unfolds”, he added, “no one is certain as to how long it may last. The suppression strategy is the right strategy, but the economic impact can be pretty long. And the longer it goes on, the more difficult it will be to sustain.” He also reminded the regional participants that we don’t have the capacity to give cheques to citizens like the US and that any fiscal stimulus will run into foreign exchange barriers. Ms. Lisa Mohammed, Deputy CEO of TOSL explained that her company was also doing all it could to facilitate the needs of workers and have limited customers access to their offices. Ms Antonia Ferrer, consultant, stated that following the WHO guidelines would help in ensuring that the right protocols are followed and would work best for companies.
As boards grapple with this new situation, it is clearly a time when new policies and procedures need to be put in to place, and we need to do it together in order to ensure that we prevail in this fight against Covid-19.