How companies internally manage the COVID-19 crisis and the unique challenges posed by the pandemic has prompted some legal experts to ask whether boards of U.S. firms need to appoint a top-level COVID-19 officer to oversee the human resource, legal and compliance issues involved.
Within financial services, the responses have varied, with some forming special committees, while others have designated a senior executive to lead the company’s efforts.
What some describe as “human capital risk management” has become a critical issue during the pandemic, some now argue that it requires a senior company officer to coordinate wide-ranging support functions within an organization. “The unique risks to business performance that a worldwide pandemic poses to human capital calls for consideration of an appointment of a board-designated member of management, with direct reporting responsibility to the board, in whom responsibility is vested for pandemic-related compliance matters,” said Jen Rubin and Melissa Frayer at the law firm Mintz Levin in a recent article.
“A ‘chief COVID officer,’ responsible for ensuring corporate compliance with applicable health and welfare obligations and the resulting safety of employees and consumers, is both an appropriate and desirable method to manage the multi-faceted risk the pandemic poses to corporate entities,” they added.
Several roles already exist that could fill these responsibilities, such as the chief human resource, legal or compliance officer. However, the key consideration for a company’s board is identifying the individual with the right training, know-how and good sense to manage the multi-dimensional risk the pandemic poses, the lawyers said.
Special committee designed for pandemic response
Another option, say experts, might be for boards to form a cross-organizational committee that brings together the expertise needed for addressing the multiple issues raised by COVID-19.
“Boards may find it advantageous to establish a special committee to oversee the corporation’s response to the multiple and complex challenges presented by the pandemic,” said Steven Haas and Allen C. Goolsby of the law firm Hunton Andrews Kurth LLP.
“In more normal times, a board and its committees may be able to exercise proper oversight while meeting, say, five or six times a year. But for many companies, that schedule is unlikely to be an option today as the corporation must deal with daily challenges that are important, multi-faceted, filled with uncertainty and constantly evolving,” they said in a note to clients. “To confront these challenges, some form of weekly or even more frequent board or committee oversight may be appropriate.”
Such a committee could be composed of those board members who are in the best position to participate in conference calls frequently and on short notice, the law firm added. Use of a special committee also would enable the board to select a group of committee members whose combined experience and expertise best qualify them to address the special challenges that the pandemic presents for the corporation.
Financial services response varies across firms
Within financial services, the crisis has produced a mix of organizational responses, and may depend on the size and scope of the organization. At some of the largest U.S. banks, the range of actions varied from special committees to a sole senior executive leading the multiple pandemic efforts needed.
At JPMorgan, the largest U.S. lender with about 256,000 employees worldwide, the bank has set up what it calls the “Return to the Office Task Force,” a committee consisting of business leaders and representatives from real estate, amenity services, technology, global security, human resources and communications “to guide and assist each location as they develop detailed plans to ready our sites to receive more employees,” said a spokesman for the bank.
The task force informed employees earlier this month that it was working on security and health protocols in lobbies and elevator banks, adjusting people-flow on floors and in common spaces, establishing new food handling protocols, including in cafes and canteens and re-mapping seating plans and tidying desk space for common use. The bank has so far not set a date for when it will return employees to its U.S. offices.
Reuters reported last week that when JPMorgan staff return to offices in regions slowly re-opening from the coronavirus lockdown, some may be required to sit at common desks, or “hot desks,” a temporary seating arrangement that management hopes will make it easier to clean.
According to a memo seen by Reuters, staff in Europe, the Middle East and Africa, the bank has no timeline for returning staff to offices, but that it is working on a plan that will limit the number of staff in buildings to about 50% at any one time.
At Wells Fargo, a spokesperson told Regulatory Intelligence: “We have taken an all-hands on deck approach to managing the pandemic, with our COO (chief operating officer) and his team coordinating the overall effort. Our focuses are on the safety, well-being and needs of our employees, customers and communities. Early on, our corporate operating committee and senior leaders across the company met multiple times a day, seven days a week, to make key decisions, and still today they are meeting multiple times per week to discuss COVID-19-related topics.”
Another large U.S. bank has set up an “infectious disease task force” which is handling much of health and safety issues for the institution. Regarding “return to work” policies, those decisions are being led by regional heads around the world, according to someone familiar with the bank’s planning.
Meanwhile, at Goldman Sachs, the pandemic response is largely led by Laurence Stein, the firm’s chief administrative officer, who is working closely with senior management as well as human resources and wellness teams, according to a spokesperson.
Regarding whether boards were heavily involved at financial firms, some industry participants said they had little evidence that there was direct board involvement on a regular basis. “From an operational/safety perspective, I would be surprised if the board had a significant role,” said one expert who has been in contact with numerous large organizations.