Directors have an important role to play in planning and implementing the workplace of the future, according to a recent study.
A PwC report, The Board’s role in rewiring work: Questions and considerations for Non-Executive Directors 2021, highlights top priorities for directors to help their organisations thrive through COVID-19. PwC finds boards are actively discussing pandemic disruption and the uncertainty around the future of work. Directors need to design strategies to help employees navigate the pandemic’s new working environment. The report recommends new approaches to: “leadership, innovation, ways of working, how we measure performance”.
Artificial intelligence (AI) technology must be adopted in workplaces to ensure the future of work is proactive, the report finds. NEDs should ensure their organisations are appropriately augmenting jobs, reskilling and upskilling to maintain the priority of digital workspaces that have appeared throughout the pandemic. Michael Priddis, CEO of analytics platform Faethm AI, says organisations that don’t embrace automation and data will become “small dots in the rearview mirror” of competitors. PwC recommends directors make long-term workforce planning an organisational priority. The report suggests NEDs should take accountability for workforce decisions such as embracing skill transitions to successfully plan the next five to 10 years.
A report case study notes global insurer Zurich invested £1m in reskilling initiatives in 2020. Its future of work strategy will see 3000 UK workers retrained, future-proofing roles against redundancy. The retraining program was designed after workforce analysis identified 270 robotics, data science and cybersecurity roles that could go unfilled by 2024 if employees aren’t prepared for the future of work.
“It’s predicted that the long-term upskilling of home- grown talent in areas such as robotics, automation and innovation could also save the business £1m in recruitment and redundancy costs alone.”
Disclose your assumptions
In June, the Australian Securities and Investments Commission (ASIC) released findings from its review of 85 listed entities’ financial reports for year-end 31 December 2020. Focusing largely on asset values and disclosures under COVID-19 conditions, the report notes many businesses have not accurately reported asset values.
ASIC says entities are more commonly using weighted probability scenarios to value assets due to pandemic uncertainty, making their disclosure of assumptions all the more critical. ASIC says it will pursue companies that ambiguously identified COVID-19 business impacts and apparently unsubstantiated future cashflow assumptions.
“As COVID-19 conditions continue to evolve, the quality of financial reports and related disclosures remain more important than ever for keeping investors informed,” says ASIC Commissioner Cathie Armour GAICD.
The regulator stresses the need for directors and auditors to drive “focus on impairment of assets”, specifically as businesses continue to navigate through the ever-changing impacts of the pandemic.
Solvency reporting review
ASIC will conduct its annual review of the full-year financial reports of selected larger listed entities and industries mostly affected by COVID-19 from 30 June 2021. Focus areas include asset values, solvency, and financial reporting disclosures.
“Disclosing key assumptions, risks, the drivers of results, management strategies and future prospects will be important for investors and other users of financial reports,” says Armour. “This includes both full-year and half-year reports.”
What’s in a name?
The World Health Organization (WHO) has created a naming scheme to label the key variants of SARS-CoV-2 — the virus- producing COVID-19 — based on letters of the Greek alphabet in ascending order. For public communications, names such as Alpha, Beta, Gamma avoid the discrimination of labelling strains after their detection location. However, in scientific research, the genetic linkage classifications will remain relevant. SARS-CoV-2 Variants of Interest (VoI) and Variants of Concern (VoC) have been monitored closely by WHO since January 2020 to ensure society adequately adjusts to combat changes and significant mutations.
Updates of the phenotypic characteristics of the Delta variant, released on June 8 by WHO, outline the severity of the new strain. “A study from Singapore showed that infection with the Delta variant was associated with higher odds of oxygen requirement, intensive care unit (ICU) admission, or death.” A study from Japan showed Delta’s association is “1.23 times higher transmissibility than Alpha.” Edition 46 of WHO’s Weekly Epidemiological update on COVID-19 (29 June) says the Delta variant, reported in 96 countries, will “rapidly outcompete” other strains and become the “dominant variant over coming months.”
What’s the difference?
Variants of concern have increased transmissibility, epidemiology, virulence, clinical disease presentation or have decreased the effectiveness of social preventative measures and vaccines. (Data correct as at 14 July.)
In the July Company Director print edition story “Companies in the Crosshairs”, it was stated that in Australia, a maximum of 15 per cent of a company’s shares is allowed to be shorted. However, in Australia, there is no legal limit on a company’s listed equities on issue that are allowed to be shorted. More accurately, the highest level of short interest in companies in the Australian market is generally around 15 per cent of shares on issue.
Learn more about short selling regulations at ASIC RG196.
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