How Australia’s boards can lead the return to work process

Monday, 25 May 2020

Sean Pascoe photo
Sean Pascoe
Partner, Advisory, BDO

    With Australia’s COVID-19 lockdowns easing, the disease appearing to be better controlled, and hopes high that we’re seeing the light at the end of the tunnel, businesses across Australia are turning their heads to the prospect of returning to work under a changed or ‘new normal’ operating environment.

    But reopening after such a significant public health event is more than a simple task. Australia’s boards are in the position to take charge of this effort and lead us to a better, healthier, safer work environment - but how?

    What role should boards play in the return to work process?

    For boards to be successful at helping their organisation return to work, there must be a clear distinction between the roles of the board and management.

    With tensions high, it’s all too easy for board members to want to get stuck in and help make decisions. However, boards must act in an oversight capacity, being strategic in its thinking and showing support for management by asking ‘the right’ questions. For example, have we completed a risk assessment on return to work and the implications to our stakeholders? Are there things we need to consider that require more information? Meanwhile, management needs to continue running the business using its business continuity strategies and at the same time actioning or ‘managing’ board requests in order to make return to work happen.

    Of course, the nature of board members means they may have valuable insight and a greater strategic perspective that is crucial to an organisation’s success. While they should try not to dive in and make decisions for management, they can share their wisdom on what may be seen as better practices or opportunities and ensure management have access to the tools and expertise they require.

    Returning to work while maintaining your values

    A company’s values are paramount to the success of a return to work strategy. It’s easier to implement changes to working conditions when strong cultural values are embedded and operating well, but potentially much harder to make decisions aligned to those same values when times are tougher and the values in the past have only been given ‘lip service’ but may not be ‘real’.

    This is one area the board plays a critical role - by taking a step back and providing oversight with a more holistic picture, boards have an opportunity to make sure that they approve the direction in which the organisation is moving, and ensure things are being done in a way that stays true to the culture they want for the business.

    A clear example of this is the difference between making balanced decisions based on the needs of the customer, protecting employees, and so on, versus making decisions solely based on one single area, such as the bottom line. If the board takes a narrow view of the return to work process, it can skew the response of the organisation and make it tougher for management to respond in a balanced way that protects the company’s overall position.

    Next steps: Restarting critical functions

    The return to work process requires the restarting of frozen or significantly reduced business functions. Management must begin to transition the organisation out of this crisis carefully. It does not want to be exposed to reputation damage (especially in situations where functions such as governance, internal audits and compliance were stopped or operated at a reduced capacity). The board can play a key role here, encouraging management to ensure no untoward events occurred during shutdown and to oversee the processes necessary to bring staff safely back to work.

    Performing a business impact assessment

    From an operational point of view, a business impact assessment may prove vital during this time. Normally performed prior to a disaster, this analysis shows the importance of key processes and the implications of shutting them down. This process can be used now, post-disaster, as part of the risk assessment process, looking at the impact on the business and allowing for lessons learned to be captured for the future. Understanding the implications (whether financial, regulatory, compliance, safety) can help the board to assist management to develop strategies and make decisions around the best return to work course.

    Analysing cash flow

    If a business impact assessment assists boards to understand what is important, a good cash flow analysis will help members know how their business is tracking, its sweet spots and implications regarding the company’s debtors, and so on. Getting clarity on cash flow is going to help board members examine what the company will look like in the next three to six months, and what its key focus should be on with its limited resources going forward.

    Aligning to the strategy

    Finally, a third step to consider is aligning the above to the broader strategy - making sure the business has clarity on what it has done to reach out, to understand what is happening in the market, and learn how customers have been affected. Depending on those circumstances, boards will be able to produce two or three scenarios that guide them on what capabilities to bring in at different points. It may even point to the undertaking of a transformation exercise, based on new ways of doing business.

    Moving forward

    The coronavirus crisis has been tough, but it’s an opportunity to push for change. It may seem comforting to return to normal after all of this has wound down, but normal may not be the best place for your organisation. Boards will need to look at this with a different lens to management, who may be predominantly caught up in the ‘here and now recovery’.

    Use COVID-19 as a reason to evolve, for there may never be an opportunity like this again in our lifetime. Question the way you did business in the past, the way you serviced customers, the ways staff worked for your company. Put in place new business continuity plans, test them, really put effort into them. Now is the time to transform.

    BDO is a longstanding partner of the AICD

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