Times of crisis provide unique opportunities for radical change. This is often by necessity, but a crisis also offers many valuable lessons. The global crisis caused by the COVID-19 pandemic is no different.

While many businesses continue to react to, and confront, immediate challenges posed by COVID-19, attention is also shifting to its aftermath and recovery, and longer-term strategic implications. Many of the changes being made by companies now will not be reversed post COVID-19. Organizations are having to adapt their operations and business models to take into account changes in supply chains and working practices, as well as changed stakeholder behaviors, needs and expectations.

To further explore the impact of COVID-19 on businesses and public sector organizations globally, the Professional Accountants in Business (PAIB) Committee met virtually in May to discuss key learnings and opportunities, as well as consider how the current situation is affecting the way in which professional accountancy organizations (PAOs) engage and support their PAIB members.

Key takeaways from the discussion include:

Organizations have adapted quickly to remote operations

The pandemic has further accelerated the pace of digital disruption. Lockdown or stay-at-home measures imposed around the world have forced many organizations to operate remotely, and make adjustments in the last two months that were previously thought not possible to achieve in such a short space of time.

In the health care sector for example, online consultations in place of physical doctor visits have become a reality.

Remote working could become business as usual for organizations, particularly as they look to control costs, and in industries where employees can be just as productive working outside an office. There will likely be impacts on the demand for commercial real estate post-crisis.

Organizations are turning to their accountants and finance teams as trusted professionals for guidance in navigating the crisis and its economic implications

The ‘core’ skills and traditional expertise of accountants around financial management are in high demand, including risk assessment (e.g. credit risk, market risk, etc.), cashflow forecasting, cost management, scenario analysis and decision support. Forecasting is especially critical as focus shifts from short term to longer-term considerations. 

Finance and accounting teams are embedding new practices and procedures and reviewing outsourcing arrangements which have been strained in some cases because of lockdowns in other jurisdictions. They are also having to apply their skills in non-traditional areas such as logistics, supply chain management, reporting on stock and utilization, sourcing personal protective equipment and other products (while ensuring appropriate governance, controls and processes in procurement), and managing relationships with new suppliers and local manufacturers. Many businesses and public sector organizations are redeploying staff to temporarily support in frontline areas.

In manufacturing, where the crisis has exposed the fragility of supply chains, organizations are exploring how they manage critical supply chains in the future, including considering reshoring options. The finance function can have a role in evaluating the business case for options using appropriate financial and nonfinancial criteria.

The importance of strong leadership and regular communication cannot be overstated

Business leaders are having to deal with change management, which in itself is difficult at the best of times, along with crisis management. In responding, leaders are:

• Ensuring regular and more frequent communication with teams, with a preference to over-communicate to keep the organization fully informed, as well as check in on staff well-being. This is particularly important where teams are working remotely.
• Focusing communication and actions on what is important and what matters the most. A key message from one member, “Don’t make things more complicated than they already are.”
• Focusing on business priorities throughout the crisis. Those who had a clear strategy before the crisis are more able to make difficult and necessary choices very quickly as the underlying business priorities are clearly understood.
• Reconsidering whether the organization’s risk management and internal control frameworks are fit-for-purpose to properly identify and assess risk, and better deal with uncertainty.

For CFOs and finance leaders, their role as co-pilots in an organization is increasingly important, particularly as businesses rethink their corporate purpose in the wake of the crisis and reconsider their business and operating models.

Boards are giving more thought to how they can balance short-term performance for shareholders against corporate responsibility and value creation for others. The sustainable development goals (SDGs) will remain an important focus for business contributing to sustainable development. The role of business is particularly important in countries where the government does not have the resources to fully support economies and meet societal needs, for example in terms of supporting national causes. Public-private partnership is critically important to plug the gaps and deal with  the inherent limitations governments have in their response to challenges presented by COVID-19; businesses need to continue stepping up. For example, it is inevitable that companies will need to make layoffs, but it is important that they think about the employment market as a whole and consider how they can create new areas of growth to compensate.