Robert Main is COO, Marc Lindsay is Director of Research, and Amy Hernandez is Associate Director of Research at Sustainable Governance Partners. This post is based on a SGP memorandum by Mr. Main, Mr. Lindsay, Ms. Hernandez, and Jessica Strine. Related research from the Program on Corporate Governance includes Socially Responsible Firms by Alan Ferrell, Hao Liang, and Luc Renneboog (discussed on the Forum here) and The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here).
A familiar refrain has emerged as the COVID-19 pandemic continues: companies will be judged for years based on the actions they take today. Perhaps no other issue will generate such long-lasting implications—to a company’s reputation, brand, and resiliency—as how a company treats its people during these trying weeks and months.
It would be naïve to suggest that there is a single right path to manage workforce size, employee health and safety, and the many other human capital issues amplified by the crisis; there are simply too many sector-and company-specific variables. What is clear, however, is the need for companies to proactively communicate their chosen path forward to their stakeholders, and to do so in a transparent, context-rich manner that goes beyond what is disclosed in calmer times. Indeed, the dialogues that companies have today with their investors will impact those relationships—for good and bad—in years to come.