The coronavirus pandemic is likely to lead to a steep, and potentially protracted, economic downturn. In response, many countries have implemented ambitious packages to support households and businesses. A pandemic requires employees to stay home to limit exposure and to prevent or slow down the spread of the disease, requiring the activation of remote working capabilities. Unlike an occasional weather event, which may prompt some employees to work remotely, a pandemic may lead to a complete shutdown of the entire facility in an area, forcing a high number of employees to work remotely for an extended duration. This may in turn result in heavier-than-normal traffic on remote connectivity networks, causing capacity and load access issues.
Your firm should review its existing business continuity and disaster recovery plans to address a variety of contingencies that could disrupt the firm's businesses, including potential pandemics. Such plans should be sufficiently flexible and reflect the firm's size, complexity, and business activities.
New ways of working. New responsibilities. New management ideas. In order to thrive in an uncertain environment it is essential to manage the day to day running of the pandemic response. This needs to be staffed by a cross section of the business to take into account impact and response throughout the different business functions. It’s got to have IT experts, people who can build websites, telecommunications experts - comms will be the currency of keeping a large business operational in the next six to nine months.
To address the unique challenges posed by COVID-19, your firm's business continuity and disaster recovery plans should provide for:
Considering the recent outbreak of COVID-19, firms should review, update, and test their current business continuity and disaster recovery plans to help minimize a potential disruption to their business operations. Firms can take the following steps to ensure adequate preparation for business continuity and disaster recovery:
1. Identify key personnel
- Appoint at least one Point of Contact (POC) or selected team members to coordinate pandemic readiness activities;
- Coordinate internal roles and responsibilities during an outbreak;
- Monitor news and announcements;
- Identify back-up personnel if the primary POC or selected team members should fall ill or be unable to execute responsibilities; and
- Identify back-up personnel for key functional stakeholders should they fall ill or be unable to execute their responsibilities (e.g., accounting and finance, portfolio manager, or investor relations backups).
2. Develop an employee communication plan
- How the firm will respond to various scenarios (e.g., closed schools, quarantine of areas, coworker(s) suspected or confirmed to be infected) - what are the plans and what must employees do to prepare);
- Whether the plan has been enacted;
- How to respond to rumors and to confirm the firm's status; and
- How and when the firm will make an "all clear" announcement and a potential return to standard processes.
3. Test and secure remote access for work-from-home situations
- Provision laptop computers, monitors, keyboards, printers, docking stations, shredders, etc.; avoid, if possible, shifting work to personally owned computers;
- Consider employees that require access to paper documents/files; identify and securely provision access to cloud file stores where shared access to documents is required (use multi-factor authentication and encryption);
- Require employees to carry laptop computers home each day as quarantines and closures may be enacted with little warning;
- Confirm remote access capabilities (e.g., VPN and Citrix equipment is up-to-date and internet service lines have sufficient capacity. Test web and voice conferencing capabilities and ensure employees have access to and understand how to use these);
- Test employees' ability to work remotely (e.g., rotate staff to work remotely on selected days during the week to identify issues proactively in anticipation of a facilities closure or quarantine order); and
- Identify the ability to reset (remotely if possible) the schedule of exterior doors automatic lock and unlock related to business hours.
4. Coordinate with key vendors and outside parties
- Develop open communications and coordination with key vendors and other outside parties, including clients, shareholders, limited partners, regulators, and the media;
- Test the ability of critical service providers to support business during a disruption (e.g., ensure clients can access investor portables or continue to receive investor/client reports);
- Consider alternative service providers; and
- Develop backup/alternative processes (e.g., manual or in-house) to ensure continuation of critical business operations.
5. Conduct staff training
- Conduct a webcast or conference call to review the BCP with your entire organization;
- Ensure employees understand roles and responsibilities during a business disruption;
- Conduct tabletop exercises in preparation for office closures, quarantines, health emergencies as well as public transportation and critical service provider disruptions; and
- Ensure employees understand how to access critical business systems as well as firm and/or client information remotely.
6. Coordinate with portfolio companies
- Private equity firms should provide guidance to their portfolio companies to ensure their BCP plans are in place and have been tested.
- Although no business continuity or disaster recovery plan can guarantee full and immediate resumption of business operations given the unknown impact of COVID-19, creating a sound framework as well as implementing strong processes and controls can help prepare your firm and its employees to handle and manage against a significant disruption to business operations related to COVID-19.
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