Significant measures by Industry to survive COVID-19 pandemic
Virtual AGM’s and EGM’s
Companies in India are able to
conduct the Annual General Meeting (AGM’s)
and Extra Ordinary General Meeting (EGM’s) through video conference/other
digital means, thanks to the relaxation/ guidelines provided by the governing
body- Ministry of Corporate Affairs.
This has ensured that the big
names such as TCS and SBI were able to conduct the AGM’s more or less at the
same time every year.
While there were challenges on
digital front in enabling this initiative, the result is so far so good and the
company and the investors at large would be accustomed to have meetings
virtually. Being first time in history, this initiative is a welcome step
towards digital transformation.
This initiative would lead to Cost
savings for the company and easier access to the investors for gaining future
insights of the company.
Business Consolidation and Restructuring
Smaller companies with strong fundaments are at
a threat of being acquired by larger companies. Whenever these type of scenario
surfaces, we do see consolidations and restructuring happens in a big way.
For example, restructuring of loans, both by
corporate and individuals is seen as must for survival. Government vide its fiscal and monetary
policies is trying to get the economy on the track again but the impact of the
credit worthiness cannot be ruled out.
While these times marks for most of them as
“Survival times”, there are few companies like “Reliance” who are having the
best time in history.
Sustainability Reporting
A sustainability
report is a report published by a company or organization about
the economic, environmental and social impacts caused by its everyday
activities.
Considering the Covid scenario, this reporting
as mandated by ICAI will need elaborate discussions before the same is released
in the public domain.
This report calls for significant judgement and
analysis and has to be backed with appropriate reasoning, so as to enable
stakeholders to make informed decisions.
Increased number of
meetings by the Board
The current scenario has lead to
increase in significant number of meetings held by the board, though by digital
means to address issues on approval of annual accounts, Covid relating
reporting, discussion on CSR spending, crisis management, business continuity
planning discussions, logistics, employee engagements, etc.
Each of these issues requires an
depth understanding and taking on board all the stakeholders on the same path requires
an outstanding Executive who is ultimately responsible for the
Organization as a whole.
While face to face discussions
did help in making decisions quickly, reaching consensus on these issues
through virtual means is no mean task and hence increased participation.
Increased role of
Independent Directors.
Independent directors does play a
major role in strategic decisions. Since they come from outside and usually
known for their renowned expertise, they do contribute in making strategic
decisions in a big way. Also the role of Independent Directors are closely
watched by the authorities in case of significant lapses on the part of company’s
responsibilities.
Financial Forecasting and Budgeting
Financial forecasting and
budgeting requires significant revamp considering the disruption caused by the
pandemic. Planning and Forecasting for a shorter interval seems important considering
the significant volatility in the market.
Cyber Security
With increasing number of digital frauds
happening and greater prevalence of digital means, it would not be incorrect to
say that Cyber Security is imperative for any organization to enable holistic
and formidable growth.
These objectives can be achieved by–
1. Robust Cyber
Security Policy
2. Increased employee
awareness
3. Keeping environment
secure.
4. Use of latest
technologies.
5. Regular monitoring
and supervision.
The board of many organizations, either already
or would be engaging with organizations who have expertise in managing cyber
security. Never before, the need of
cyber security would have been felt this much important as this time, since
work from home is already being considered as additional place of work
environment.
It is imperative to say that Forensic Auditors
and Information Systems Auditor would play a GREAT role with the advancement of
technologies.
While the big companies would be
in far better situation in handling complexities on the digital communication
today, the small and medium scale companies are thriving hard to maintain their
existence.
While this may significantly
impact their operations in the short term, the companies who are run by able
management will factor these challenges while preparing the long-term strategy
and will come out strong once the situation improves. So the organizations
which are able to convert challenges into opportunities while keeping their
long term vision intact will survive.
Faceless Assessment
Many authorities have started proceedings
virtually, which underlines the importance of the digital transformation.
Government has taken active steps to enable hearings and reaching conclusions
digitally.
Industry are coping with the new change and
while initial hickups would be there but on long term trajectory, the outcome
would be win-win situation for all sides.
Significant CSR
Contribution
CSR contributions have seen a
significant upside in these times which reinforces the fact that these
contributions does have a pivotal role in the upliftment of the society.
Further due to wider ambit of CSR initiatives approved by the Government would
lead to greater spending by corporates at large.
Also considering the significant
changes in the CSR reporting required in the Companies Auditors Report Oder,
2020 proposed to be implemented from the next financial year, organizations
needs to revamp their CSR policy and have greater visibility and monitoring.
Greater employee
engagements including motivating sessions and learning path
Human Resources team are actively
engaging employees through various learning and motivating sessions to keep
them enthused in contribution to the organization at their optimum level.
Needless to say, the engagements
have increased substantially during these times.
Overall, these steps would thrive
digital transformation and it is must for any organization to not just survive
but “GROW”.
Disclaimer –This article is meant for general
awareness purposes only and in no way be deemed to be an advice or solicit any
marketing whatsoever. Any decisions based on this article would not held me
liable for any action whatsoever. Please get in touch with your functional
consultant to understand the scope and impact pertaining to your industry.
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