Last fall, Bloomberg Law analysts issued their collective views for 2020, never imagining an unprecedented pandemic would paralyze the public and private sectors indefinitely. I covered the Business Roundtable’s (BRT) statement “to deliver value” to an expanded pool of stakeholders—employees, customers, suppliers, communities, and shareholders. At the time, I questioned whether such delivery would ever materialize.
Covid-19 allows the BRT an opportunity to make good on its pledge and to prove the skeptics wrong. Implementing their aspirational principles from last summer into demonstrable actions may help BRT members protect—and possibly build—their reputation during this challenging period.
To date, the BRT has taken some measures in response. According to the group’s dedicated Covid-19 page, members are helping coordinate supply shortages, issuing letters and statements to governmental actions, and recommending policy guidelines to help with the pandemic.
The magnitude of the crisis requires more.
The BRT should act more concretely to help all stakeholders. Members and their companies will face questions from their investors, employees, consumers, local communities, and other stakeholders over their handling of Covid-19. The group will want to be ready with responses as to what they have done, are doing, and will do to uphold their commitment: a commitment they made to deliver value to all of their stakeholders for the success of companies, communities, and the country.
Adopting a New Pledge
One way for the BRT to step up: Adopt a new pledge to document the group’s commitment to pandemic relief and ask members to sign on, committing their companies to help stakeholders get through this crisis.
If the group needs a model for a pandemic-related pledge to convince their members, they can use another group’s: a collaboration between most major internet and wireless providers in the U.S. and the Federal Communications Commission to keep Americans connected to communications and Internet resources. Many Americans are home because of social distancing or compulsory stay-at-home measures and facing dire economic circumstances. Maintaining access to the internet and wireless services is needed now more than ever. The FCC pledge addresses both challenges by ensuring access as a result of reduced fees or charges, waiving late charges, suspending terminations, and in some cases providing free service and devices.
The new pledge should be simple and direct. If the group needs an example of what the new pledge it can look something like this:
In response to the coronavirus pandemic, [company name] pledges for the next [90 days, six months, or 12 months] to take actions to support our stakeholders during this pandemic and will report periodically on what we do to ensure transparency and the effective execution of our commitment.
If the group needs examples of how to operationalize their own special Covid-19 pledge, it can consider efforts that are already underway:
Forgoing executive compensation. A few executives at leading U.S. corporations have decided to forgo their salaries in 2020. One company’s CEO is forgoing his salary and bonus, while his company has decided to suspend its dividends.
Supporting employees. Companies are supporting their employees with remunerative gestures such as paying cash bonuses, increasing their pay, or giving them stipends. Some companies are offering to pay for “wellness programs” to help their employees deal with stress during these unprecedented times.
Supporting communities. Companies are supporting their communities by donating masks, while others are giving their entire supply of personal protective equipment (PPE) to front-line workers and health care staff. Others are converting their operations to produce PPE or hand sanitizer.
Supporting small business. Companies are helping small businesses through a coalition of more than 40 organizations to provide meaningful support to small businesses to withstand the impact of Covid-19.
The new pledge should be accompanied by a process to properly evidence the pledge in action.
A reporting obligation is critical to document the BRT’s actions and promote transparency. Trackers and reports monitoring corporate responses to the pandemic are already in place. The BRT can use these or develop a separate tracker to provide periodic updates.
BRT members may also want to consider engaging with their different stakeholders in a more meaningful way, instituting small-group virtual meetings for non-shareholders. BRT members and stakeholders can discuss concerns about the uncertainty and unknowns about this pandemic. Allowing stakeholders to engage with corporate leaders directly about their challenges, issues, and concerns, might even lead to future iterations of BRT-led measures.
After the period of the pledge expires, BRT members should have an opportunity to determine if they want to permanently implement any of the measures for their business operations. If they do, they should be vocal about it.
One final step that BRT members should take is a “lessons learned” exercise. What have they learned while working to fulfill their pledge? What could they do better? And what did they do well that they could apply in future crisis management planning?
In the end, actions taken today by the BRT will be judged in the future by the very stakeholders they want to support. BRT members should be mindful that their stakeholders will not forget their actions—and their inaction—now or in future investment and engagement decisions.
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