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.