The COVID-19 pandemic is both a social and financial crisis where trust will be central to corporate and political survival. People at all levels of the organisation are being asked to change the way they work, interact both professionally and socially and often how they live. To effectively deal with the impact, boards will need to adopt, and ensure management adheres to, the principles of good communication.
Extracted from J Connolly FAICD, 26 March 2020, Effective internal and external crisis communications, Australian Institute of Company Directors COVID-19 Resources.
Communication refers to the processes, systems and structures to ensure there is a shared understanding among stakeholders that:
- creates effective awareness of the health risks and behaviours necessary to manage those risks;
- promotes behaviour that protects physical and mental health in the extended workplace;
- allows the organisation to operate as productively as possible;
- keeps shareholders and regulators satisfied;
- ensures directors appropriately discharge their responsibilities; and
- creates the environment for the best possible recovery.
While there have been similar black swan events before, it would be a mistake to simply compare COVID-19 to other pandemics like SARS, HIV/AIDS, Ebola and Swine Flu and simply think through the differences and the different actions needed.
The crisis management team
Basically, the COVID-19 crisis sees three ‘pandemics’ running together. The virus, the panic about the virus and the business and economic implications. All three are genuine crises. Each one needs different communication tactics. However, what is critical is that as well as doing what’s necessary to survive, the board also sets a pragmatic objective for what effective recovery looks like.
To achieve this, two teams are required. The main team focuses on crisis management. It is a central, delegated decision-making group whose focus is on talking with a single voice (with a single consistent theme), responding quickly (taking legal advice into account but not using it as an excuse for inaction), being proactive towards key stakeholders and understanding the importance of social media. The smaller team focuses on where the organisation wants to be after the crisis and works back from there.
Both teams, management and the board need to clear there is no penalty for delivering bad news.
In similar crisis situations, some large Australian companies set up a crisis management centre – depending on company and/or government policy, it may be physical or virtual – with a project manager (a senior executive or trusted advisor), internal and external legal counsel (the more pragmatic the better), a company communications/corporate affairs lead, an external communications advisor, an internal or external analyst, an investor relations lead, a subject matter specialist and the ability to call in internal and external experts as required. Ideally the project manager reports to the CEO with visibility to the board. It is essential to have one or two people whose task it is to take note of major proceedings and fact check. Usually one of these team members has responsibility (with assistance) for establishing a single source of truth, that can then inform every communication activity.
This centrally located crisis management team is critical to the company speaking with one voice to all stakeholders and that this voice is in line with the organisation’s values.
Crisis communication leadership
There are two distinctive features of any crisis:
- It is a time for critical decisions. Effective boards will need to resist the impulse to micromanage. It is important to ensure that there are clear guidelines on what type of decisions need to be made by the board, the CEO and the crisis management project lead and let them get on with it.
- Crises are a clear distraction from the main work of the company. Many businesses get so overwhelmed by managing the crisis that the business suffers more from that than the impact of the crisis. Setting up the teams recommended provides a strong opportunity (as far as possible) for the rest of the organisation get on with their jobs.
No matter the size of your organisation, one thing is certain – all stakeholders will look intensely at what, if any, leadership a company demonstrates during this COVIS-19 crisis.
The importance of solid leadership as an effective tool to build stakeholder trust cannot be underestimated. In a crisis, employees and others make long-lasting judgements about the competence and ethics of the CEO or chair. As we have seen with political leaders over the last few months this is based less on what the leader says and more about what he or she does. A firm and clear leadership strategy will be required.
To be clear, taking an external leadership position is a strategic choice. For some organisations keeping your head down externally is the right decision. But you have no choice internally. You have to demonstrate leadership to your employees and other internal stakeholders. Of particular importance with COVID-19, a leader must principally demonstrate that he or she understands the duty of physical and mental wellbeing they have for employees.
Important issues to consider with COVID-19
Emotional responses anchor trust
- It’s not just employees and the rest of the general public that are anxious. Directors feel the same way. Recognise your own feelings when you are discussing the issues and making decisions.
- Leaders need to understand that this is an emotional issue. Rational explanations and reassurance need to be complemented by an emotional response. For most people, COVID-19 is more a financial and emotional issue than a health issue.
- The more specific you are in your communications the more considered and trustworthy you will come across.
- No one is overreacting. In fact, what we’ve seen is that some companies and some governments haven’t reacted significantly enough and still aren’t acknowledging how quickly business, government and the public need to move. Firm and clear decisions will limit confusion and uncertainty.
- We need to acknowledge that the world has changed and that this change could last for many months. While there is no benefit in being overly pessimistic, being overly optimistic will diminish trust particularly if those optimistic scenarios are proven over time to be grossly inaccurate.
- Free media is not the only available media. Advertising in traditional and social media can be critical.1
Effective communication supports employee wellbeing
- Direction in terms of place of work needs to carefully and sensitively consider mental and physical health risks, communication flows and productivity evaluation and support.
- The ability of employees to work from home may be impacted by logistical considerations such as the presence and requirements of family, space limitations, and the need to proactively balance work life and personal life. Are there outsource strategies, equipment and platforms the organisation can adopt or employ to assist these employees?
- Mental health support is emerging as a major WHS issue during the COVID-19 crisis, with many employees having to rapidly adjust to changing work environments, which can create stress, friction and isolation.
Effective communication supports business wellbeing
- Face-to-face investor relations channels are impacted and it’s critical to have an active plan to maintain investor and shareholder communication and confidence at a time when there is likely to be heightened interest from the investor community in how your organisation is managing the crises. Refer to the Australian Securities and Investments Commission’s temporary practical guidance for AGM requirements.2
- Become aware of the current guidance issued by accounting and auditing standard setting bodies, the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB), on how organisations should report the impact COVID-19 is having on their business.3
- Scenario planning is a useful tool for dealing with uncertainty about the future. Communicating with stakeholders on the basis of best to worst case scenarios will demonstrate that your organisation has a sound approach and is working within a well-considered range of possible outcomes.
BAU needs to be quickly redefined
- Look at and talk through implications for your supply chain and value chain. As with many crises, there may be a new normal at the other end. It is important to understand the experience of others, how customers are reacting and will react over the following months.
- This is a time to review your business model. Determine your company’s vulnerabilities. Model the effects and possible solutions. Investors will be looking so your organisation will need answers.
- Review IT systems, organisational structure and people. Will your systems be appropriate to manage through the crises and implement your response? What is the impact on key staff working from home, being sick? Can your systems respond to different ways of working?
- Review HR practices and policies for the crisis and post-crisis periods. What are they going to be now and in the longer term? What are the implications of the crisis in terms of employee retention? Will you employees become advocates or critics of your organisation during and after the crisis?
- What is the structure of your current workforce? What will happen to that workforce if the crisis lasts six months? 12 months? How will you position the organisation to have capabilities required post-crisis? Do you have the right capabilities for the current evolving business environment?
- Keep an appropriate paper trail.
Implications for COVID-19 communication plans
By positioning COVID-19 as a conflagration of three crises (virus, panic, economic impact), there are some clear communication plan implications. These can be divided into three categories: collaboration between board and management, internal communication plans and external communication plans.
Collaboration between board and management
- Ensure the crisis management team and the post-crisis planning team have good reporting flows, and are not dissuaded from communicating the good and the bad news, to and from the board.
- Be clear about who will lead on communication for the organisation. It may be the CEO or the chair, but not both. There should be equivocation from whoever is selected.
- Establish clear parameters for unified leadership communication; be calm, be firm, be consistent, be clear, be empathetic, be a trusted voice of authority, don’t be over-optimistic, don’t make promises that can’t be delivered, don’t be excessively pessimistic, don’t be afraid to say “I am giving you the clearest answer available at the moment and will keep you informed”.
- Be aware that in these situations there is always a tension between providing accurate information and providing information quickly. Be mindful of any tendency to wait and see. It’s often preferable to get short sharp information out quickly, with what is known, rather than wait until all the facts are established before communicating anything.
- Understand your audiences. Who is important to your business, and who is impacted by your business and what are each audiences’ priorities and reactions towards the three crises (stakeholder analysis)?
- Don’t be afraid to talk in terms of scenarios or probabilities.
- Communicate in bullet points not long form narrative.
- Be prepared with agreed statements and positions. For example, what will the organisation say when an employee tests positive for COVID-19?
Internal communication plans
Every group of employees will be different with different levels of understanding or ability to think through what is happening, different ways of responding to crisis (rational, emotional, calm, anxious, etc.) and different means for dealing with crisis (private study at home, sharing the kitchen table with family, lost income, etc.). It will be important to understand where your employees sit now and, if possible, understand how this changes over time.
Some relevant considerations for management:
- Demonstrable leadership is essential for building trust.
- Anxiety and uncertainty have a more powerful negative impact than clear, bad news. If you have bad news, deliver it with empathy and don’t try to sugar coat it.
- Give employees the chance to express their feelings and have them acknowledged, to ask questions and get straight answers.
- Don’t feel you have to be optimistic beyond “this will end eventually”.
- Employees are looking to leaders to reduce anxiety, not increase it. Provide reassurance but don’t make promises that can’t be delivered.
- Help employees sort through conflicting advice from different authorities and provide contact points for trusted and reliable sources of relevant information.
- Consider carefully how directives or requests to employees are made in line with duty of care particularly taking account of heightened anxiety and legal obligations.
- Where they exist work through existing and familiar communication channels, or create new mechanisms to maintain a sense of workplace belonging.
- Consider creating an online workplace community to replace the physical workplace community where this is relevant and important to your employees.
- Identify the most appropriate communication two-way channels to keep your employees informed of developments relevant to the company and allow them to ask questions or seek clarification as they would in a physical workplace.
- Remember people may be feeling isolated and it is important to maintain one-on-one calls to key personnel and employees who may be feeling anxious.
- Working virtually and remotely means you will need to be very specific in what you are asking employees to do. Discuss not only what needs to be done now but also what needs to be done next.
- Communicate the same message again and again: in times like this when you’re sick of saying it, your employees are just beginning to get it.
External communication plans
A stakeholder analysis and heat map will allow you to identify who is important to your business and who is impacted by your business and the priorities they have for communication. As well as employees (discussed above in the context of internal communication), other stakeholders would include investors, customers, suppliers, regulators and communities. There is no one-size-fits-all, so different companies will have different external audiences with different priorities. Nevertheless, developing trust with these audiences will be central to the sustainability of your organisation through these crises.
Some relevant considerations for management:
- Establish a clear, tiered prioritisation for your external audiences, understand what they need to know, how they like to receive their information and how often they would like to hear from you.
- If you want to communicate with government, make it helpful. If your organisation is big enough, keeping local, state or federal governments informed of the trends you’re are seeing may be useful.
- Make sure all communication is clear, succinct and additive. Don’t waste time and opportunity with meaningless communication but do be prepared to keep repeating key points and themes.
- Don’t be afraid to show empathy and understanding of individual, organisational, sector and social situations and issues and explain how you are trying to help.
- Use scenario analysis, business model, supply chain and value chain models to help pressure test your understanding and articulation of how the organisation can help customers and suppliers, and (at the appropriate time) keep investors informed about how you are managing risk.
Key board questions for pressure testing COVID-19 communication plans
- Are the board and management aligned and clear in terms of crisis communication roles and responsibilities? In the short term, and if the crisis lasts for 6-12 months?
- Does the board have all the information it needs to understand the full range of risks to our employees, our organisation and our industry?
- Does management have a clear business objective for its communication strategy and plans?
- Does the company have a comprehensive communication strategy or just templated crisis communication plans?
- Does the board understand who are the critical stakeholders the organisation needs to be communicating with and the plan for getting and listening to all those stakeholders?
- Does the board have confidence the organisation has reached every employee and contractor?
- Does the board understand how the organisation is communicating with customers and how customer behaviour, sentiment and anecdotes will be effectively reported?
- Does the board have a clear understanding of the duty of care in relation to changed work arrangements, physical and mental health of our employees and how the organisation is going to communicate with employees on an ongoing basis?
- Is the board clear about how it will manage communication and retain the confidence of investors through this crisis? For example, how will it communicate the impact to organisational strategy of the recently announced six-month temporary relief for directors from personal liability for trading while insolvent?4
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Footnotes
1 Editorial, 2020, “Government must flood the media with its coronavirus message”, The Sydney Morning Herald, 24 March, https://www.smh.com.au/politics/federal/government-must-flood-the-media-with-its-coronavirus-message-20200324-p54dh4.html, (accessed 25 March 2020).
2 L Bacon, 2020, ASIC announces temporary measures for AGMs amid spread of COVID-19, 20 March, Australian Institute of Company Directors, https://aicd.companydirectors.com.au/media/media-releases/aicd-welcomes-asic-new-guidance-for-agm-requirements, (accessed 25 March 2020).
3 D McElrea, 2020, Coronavirus financial effects - guidance from accounting standards bodies, 19 March, Australian Institute of Company Directors, https://aicd.companydirectors.com.au/resources/covid-19/coronavirus-financial-effects-guidance-from-accounting-standards-bodies, (accessed 25 March 2020).
4 L Bacon, 2020, COVID-19: What directors need to know about the lifting of director liability for insolvent trading, 24 March, Australian Institute of Company Directors, https://aicd.companydirectors.com.au/resources/covid-19/what-directors-need-to-know-about-lifting-director-liability-for-insolvent-trading, (accessed 25 March 2020).
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About the author
John Connolly FAICD is an experienced public relations professional with over 40 years of consulting to and working for some of the world’s largest companies and organisations on a range of difficult issues. He was the only non-US citizen to be a member of an internal committee of the New York Stock Exchange and moved from the NYSE to become a member of the global branding committee of Bristol Myers Squibb in New York.
About us
The Australian Institute of Company Directors (AICD) is committed to strengthening society through world-class governance. We aim to be the independent and trusted voice of governance, building the capability of a community of leaders for the benefit of society. Our membership includes directors and senior leaders from business, government and the not-for-profit sectors.
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Disclaimer
This document is part of a Director Tool series prepared by the Australian Institute of Company Directors. This series has been designed to provide general background information and as a starting point for undertaking a board-related activity. It is not designed to replace a detailed review of the subject matter. The material in this document does not constitute legal, accounting or other professional advice. While reasonable care has been taken in its preparation, the Australian Institute of Company Directors does not make any express or implied representations or warranties as to the completeness, currency, reliability or accuracy of the material in this document. This document should not be used or relied upon as a substitute for professional advice or as a basis for formulating business decisions. To the extent permitted by law, the Australian Institute of Company Directors excludes all liability for any loss or damage arising out of the use of the material in this document. Any links to third-party websites are provided for convenience only and do not represent endorsement, sponsorship or approval of those third parties, or any products and/or services offered by third parties, or any comment on the accuracy or currency of the information included in third party websites. The opinions of those quoted do not necessarily represent the view of the Australian Institute of Company Directors.
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