Practical Governance During the COVID-19 Crisis

COVID-19 is wreaking havoc with business across the world, affecting employers, employees, suppliers and customers.

It is creating a huge legacy of litigation around broken contracts, financial damage, health issues, and so much more. Mixed in this will be how Governmental guidance and direction excuses/exempts certain actions and liabilities.

Once the world starts returning to a more normal state, business owners will face legal actions from many directions. Employees who consider they were mistreated, suppliers who were not paid, customers who were not satisfied, maybe even regulatory lapses, etc..

As leaders and managers strive in a difficult situation to “do the right thing” across a mix of stakeholders, it is easy to let aspects of good governance slip, in particular keeping adequate records of discussions and decisions. These may seem unimportant now, but will be critical in any future legal dispute when having appropriate records will be the cornerstone of any good defence. It is likely that the party with the better records will have a distinct advantage (assuming they have behaved correctly in the first instance).

This applies as much if not more to small companies as it does to large ones. Large ones are better equipped and more resilient to legal challenge (better lawyers?), when a smaller company could easily be overwhelmed financially and in terms of effort required to deal with these matters. These processes could be long and drawn out at a time when many businesses are struggling to survive and re-establish themselves.

To this end, a business owner must take steps now to ensure that necessary records are kept and secured. It is impossible to be prescriptive about everything that needs recording because each business is facing different challenges, but it is likely to include, but not be limited to:

•  Decisions re staff including who are furloughed etc
• Decisions to change/withhold payments
• Response to official enquiries
• Requests to (and responses from) suppliers for forbearance etc.
• Safety aspects
• Complaints 

The form and nature of these records will depend on the nature, size and maturity of the business involved. Those with established board practices and company secretarial capability are better placed, but small businesses can implement appropriate responses.

I suggest that as soon as something of record is done, a note should be made addressing the “who, what, why and when”. These notes can be made in something as simple as a diary or day book, possibly physical or better a secure electronic store. Additonally I recommend a weekly practice to review what has been recorded and, if there are gaps, fill them.

Of course, there may be a suggestion that these records have been created in hindsight and/or subsequently altered. I have a simple suggestion for this.

Assuming your company email is resilient and backed up, my suggestion is to create a user called something like COVIDRecords@company.com. Now if you send a mail to that address each time you have something to record, not only do you have a secure record, you also have an independent record of when that record was made that should stand future scrutiny.

This effort doesn’t have to be onerous or complicated, but I do believe that a small investment now will pay dividends as we enter a post-COVID world.