Níall Fitzgerald explains how boards can use the current crisis to take stock and, where appropriate, reflect new priorities.While the COVID-19 crisis continues, organisations are preparing for the uncertainty ahead. This process presents an opportunity for organisations to rethink their priorities, how they deploy resources, and the way they do things.In the months ahead, boards will face new challenges that can give rise to major concerns. This article examines some of those challenges, the responsibility of boards in facing them, and questions board members can ask to help focus on what is important.Going concernIrish and UK company law requires directors to act in the best interests of the company, which includes promoting its success and ensuring that it continues as a going concern. Past corporate collapses have revealed instances where directors failed in this duty. Failures attributed to directors include having unquestioning optimism rather than a challenging mindset and succumbing to groupthink.Given the current uncertainty, threats to going concern are more likely to feature higher on the risk register in many organisations. Oversight is a key role of the board, and this requires directors to have a questioning mindset, apply their skills, experience and knowledge to challenge management appropriately on their judgements, and ensure that they have sufficient evidence to support those judgements. Having a range of skills, experience and knowledge (in addition to diversity in other forms) on a board will help ensure that a range of perspectives and practicalities are considered. Basic good governance practices such as reviewing meeting papers in advance, arriving to meetings prepared, and an effective chair who allows sufficient time for discussion will make a big difference to the quality of the decisions or actions arising.In June 2020, the Financial Reporting Council (FRC) published COVID-19 – Going Concern, Risk and Viability: Reporting in Times of Uncertainty. The paper highlights how challenges that would normally relate to building resilience and flexibility (e.g. sourcing short-term cash resources) have pivoted as a result of the pandemic to threats relating to survival and, therefore, going concern.Other examples of current threats and challenges to going concern include:further restrictions that limit the return to normal operations;restrictions placed on government (or other) capital;timing and continuation of government schemes and support packages;short-term impacts of pricing changes to revenue and expenses; andimpacts on human capital.An Institute article titled Going Concern Considerations for Members Preparing or Auditing Financial Statements in the Context of COVID-19 is available on the COVID-19 Hub on Chartered Accountants Ireland’s website.Social responsibility, and public and employee welfareDirectors have a duty under company law to have regard to the interests of employees and will therefore be involved in making important decisions in relation to workforce policies and practices. In addition, corporate governance codes (e.g. the UK Corporate Governance Code) and sustainability frameworks (e.g. an environmental, social and governance (ESG) framework) highlight how a board’s consideration of all stakeholder interests, including societal impact, is important to ensure the organisation’s long-term success.The COVID-19 crisis forced many organisations to rapidly transform the way they work. In many cases, anticipated obstacles to business continuity either did not arise or were overcome with adjustments to how work and people are managed, as well as investment in ICT infrastructure, connectivity and cybersecurity. In April 2020, The UK’s Office for National Statistics (ONS) released statistics revealing that 49% of adults in employment were working from home. In May 2020, an Irish survey of remote working during the COVID-19 crisis by the Whittaker Institute at National University Ireland Galway and the Western Development Commission revealed that 51% of respondents never worked remotely before the COVID-19 crisis. Of these, 78% would like to continue to work remotely.As public health restrictions are lifted, boards – or board chairs, at least – should engage with CEOs and executive management to support the restoration of operations and plan the safe return to the workplace of employees, suppliers and customers. Executive management and boards should be aware of, and follow, national and local government protocols issued on returning to the workplace.No plan survives the battlefield, so expect adjustments along the way. Updating the board and seeking direction at every turn is not practical, however. It might, therefore, be wise to establish an oversight working party with regular executive engagement and delegated responsibility for overseeing the implementation of plans to restore operations. Decision-making authority should be clearly defined to ensure issues are, where appropriate, referred to the board for a decision. As boards plan for the return to the workplace, directors should consider the following:what work can be done remotely?do certain internal policies need to be rewritten to support new or future ways of working?are there opportunities for automation or digitalisation?what impact could remote working have on organisational culture, and what changes are necessary to align it with the organisation’s mission, vision and values?Boards also have an opportunity to consider how their organisations can have a greater positive social impact. During the crisis, some organisations went further with social responsibility by redirecting their resources to provide support, services and products to the fight against COVID-19. Charities and other not-for-profit organisations excelled in meeting the social needs of many vulnerable people affected by the crisis. Many organisations incentivised staff to get involved in volunteerism to help with, or raise funds for, good causes. In fact, organisations such as Volunteer Ireland and the Royal Voluntary Service reported a surge in registrations, resulting in a surplus of volunteers.Sustainable ‘reset’An important principle set out in the UK Corporate Governance Code is for a board “to promote the long-term sustainable success of the company”. This involves considering how the organisation generates and preserves value, and contributes to wider society over the long-term. It also involves considering the sustainability of the business model – weighing up resilience with efficiency to achieve long-term success. In times of uncertainty, some efficiencies may be sacrificed to achieve resilience. A board’s macro perspective can make a significant contribution in helping the organisation achieve a balance between these two factors.As part of pre-recovery planning, many organisations will engage in horizon scanning to anticipate changes, sources of uncertainty, and future threats and opportunities. While the effect of the COVID-19 crisis on operations may dominate risk perception, organisations also have a unique opportunity to consider how they can rebuild better, greener, and for a more resilient, sustainable world. Boards are well-positioned to lead and encourage innovation on how organisations can adapt to expectations of sustainability from key stakeholders such as investors, customers and regulators. These expectations are apparent in changing social behaviour (e.g. support for global climate protests), investor conditions (e.g. ESG goals or investors’ adoption of Principles for Responsible Investment), and regulator mandates (e.g. the development of standards for ESG disclosures for financial market participants, advisers and products).The 17 UN Sustainable Development Goals (SDGs) provide a blueprint that can be used to define an organisation’s sustainability objectives. The World Economic Forum refer to this opportunity as the ‘great reset’. We all have a vested interest in averting further global crises. When boards are resetting their agenda to focus on new priorities, sustainability must be a key consideration in more ways than one.ConclusionOrganisations can expect further challenges in the months ahead. This is not ‘business as usual’ and boards are adapting as the situation unfolds. Whether an organisation is struggling or thriving in the uncertainty, key priorities for any pre-recovery strategy must include going concern, social responsibility, employee and public welfare, and sustainability.Níall Fitzgerald FCA is Head of Ethics and Governance at Chartered Accountants Ireland.

Boards and Corporate Governance – Covid-19 Implications Boards and their advisors will need to consider how the spread of coronavirus has affected the governance and operations of their business including risk, internal controls, financial reporting, audit and assurance and other regulatory and corporate reporting requirements. The extent of the risk arising and the impact it may have will vary depending on the company’s specific circumstances and exposure. Over recent months, much has been issued in terms of advice from regulators, and commentary, regarding various corporate governance considerations related to the spread of coronavirus. The challenge is to stay ahead of what is an evolving situation. We are regularly producing webinars and articles bringing relevant updates and expert insights to our members. For example, our Covid-19 crisis: Advice to boards and organisations available to view (scroll down to “Past Webinars”) here. We have assembled below some information, for UK and Republic of Ireland, that we have come across that may be of assistance to members. Commentary should not be taken as advice or as a comprehensive analysis of all aspects. When reading information at the links below, due care should be taken of the date of issue and any developments in the interim that may not be reflected in the material published, such as updated statements from regulators etc. Our members’ expertise, judgement and experience are now invaluable to guide each organisation on their unique journey through and beyond this crisis. We encourage all our members to remember that your first responsibilities are to yourself and ensure that you stay well. Take some time to review the member resources offered by Chartered Accountants Ireland in relation to wellbeing and building personal resilience at CA Support. In the meantime, remember that your Institute is here to help you. If there are specific issues where you need help, or if you want to share ideas or insights, please contact us at either ethicsgov@charteredaccountants.ie or +353 1 637 7382.   From the regulators: Link Ireland and UK – All entities applying accounting standards UK Financial Reporting Council (FRC) issue (14 April 2020) update and clarity on accounting and auditing standards requirements in relation to going concern and alerts for investors. This is important matter for boards to consider and further information is contained Chartered Accountants Ireland information hubs on financial reporting and statutory audit referred to further down in this table. FRC Covid-19 update regarding going concern UK – Listed and Regulated Institutions FRC, Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) announced a series of actions (26 March 2020) to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets. Includes forbearance measures for UK listed companies on publishing annual reports and preliminary results and guidance for UK banks on capital requirements and building uncertainty into expected credit loss calculations. Joint Statement UK and Ireland Listed entities UK FRC Guidance for companies on Corporate Governance and Reporting (Company Guidance Update March 2020 (COVID-19)) – contains guidance on corporate governance matters such as risk management an internal controls, management information, estimates and forecasts, dividends and capital maintenance, Directors/strategic report, viability statement and going concern and some key financial reporting considerations. Corporate governance and reporting guidance UK and Ireland Listed entities UK FRC publish Guidance for companies on Corporate Governance and Reporting. They highlight some key areas of focus for boards in maintaining strong corporate governance and provide high-level guidance on some of the most pervasive issues when preparing their annual report and other corporate reporting. Guidance for companies on Corporate Governance and Reporting UK and Ireland Listed entities UK FRC publish Lab report providing examples for companies to follow when making going concern assessments, risk reporting, and producing viability statements.   Note: Podcast interview with Phil Fitz-Gerald, Director of the FRC Lab, discusses two new reports on investor disclosures during the Covid-19 crisis. Report on Covid-19 related going concern, risk and viability UK and Ireland Listed entities UK FRC publish Lab report providing practical guidance and examples to companies to help meet the challenge of reporting to investors in times of uncertainty. The report focuses on company reporting in respect of their resources, action they are currently taking in response to issues and future objectives they expect to achieve.   Report on Covid-19 – reporting in relation to resources, action, the future. UK Financial Services UK FCA published a letter addressed to CEOs of firms providing services to retail investors (31 March 2020). The letter outlines some rule clarifications, temporary flexibility in the FCA’s supervisory function and guidance in relation to ensuring resilience during the Covid-19 crisis. FCA Letter to retail investor service providers EU Financial Services European Securities and Market Authority (ESMA) issued a public statement Actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines under the Transparency Directive. ESMA Public Statement EU Financial Services ESMA issued a public statement (9 April 2020) calling on National Competent Authorities to take into account the Covid-19 outbreak in respect of upcoming reporting deadlines for fund managers to publish yearly and half-yearly reports. ESMA Public Statement re Investment Funds EU Financial Services ESMA issue opinions of support to short-selling bans by Austrian, Belgian, French, Greek and Spanish National Competent Authorities. ESMA support short selling ban EU Financial Services European Banking Authority (EBA) have issued a statement (12 March 2020) on actions to mitigate the impact of COVID-19 on the EU banking sector. EBA statement of actions   Further possible actions announced (31 March 2020) EBA statement of actions 2 EU Financial Services EBA issue a statement (25 March 2020) calling on certain forbearance measures on consumer and payment issues to be granted by financial institutions. Statement on consumer and payment issues EU Financial Services EBA issued a statement (31 March 2020) urging banks to follow prudent dividend distribution, share buyback and variable remuneration policies, emphasising that any capital reliefs permitted by central banks are to be used to finance the corporate and household sectors only. Statement on prudent distribution and remuneration policies EU Financial Services EBA publish guidelines on treatment of loan repayment moratoria considering Covid-19 measures, clarifying circumstances in which a moratorium of this nature would not be classified as part of a forbearance or distressed restructuring by the bank. Guidelines on treatment of loan moratorium in financial and credit institutions Ireland Financial Services Central Bank of Ireland has issued a statement (19 March 2020) on several matters including reducing the counter cyclical buffer requirements for banks to 0% and expectations on payment breaks for businesses and consumers. Central Bank Statement 19 March 2020 Ireland Financial Services Central Bank of Ireland has issued a statement (27 March 2020) on its expectations of insurance firms to ensure customer-focused decision making throughout the crisis. Central Bank Statement 27 March 2020 Ireland Financial Services Central Bank of Ireland has issued a statement (31 March 2020) on its view as to what constitutes essential banking and financial services in context of the Irish governments public health measures to prevent further spread of Covid-19. Central Bank Press Release 31 March 2020 Ireland Financial Services Central Bank of Ireland launches an online Covid-19 information hub for consumers, SMEs and regulated firms CBI Covid-19 Information Hub Ireland Charities Charities Regulator (Republic of Ireland) have published answers to several frequently asked questions around regulatory reporting and governance matters affecting Charities during the Covid-19 crisis including forbearance in relation to annual reports due between now and 29th June, keeping records of meetings, considering charitable purpose in any pandemic relief activities and ensuring funds are not misspent, etc. Charities Regulator Frequently Asked Questions Northern Ireland Charities The Charity Commission for Northern Ireland have published updates on regulatory reporting, advice regarding charity meetings, serious incidents reports and accounting matters The Charity Commission for Northern Ireland update Ireland and Northern Ireland – Tax and general business Chartered Accountants Ireland are engaging with government agencies, regulators and the Revenue authorities, North and South, around the impact of the COVID-19 outbreak, and potential issues with filing deadlines, payments etc. Their responses and links to information are regularly updated on our technical and business updates section. Technical and business updates UK – All Companies UK Companies House published, and regularly updates, coronavirus guidance for companies in relation to several company secretarial requirements, e.g. filing documents, share buy backs, etc., and other information relating to their services, employees and suppliers. Guidance for Companies House customers UK – All companies UK Companies House publishes guidance on temporary changes to Companies House filing requirements arising from (Filing Requirements) (Temporary Modifications) Regulations 2020 that were signed into law following enactment of the Corporate Insolvency and Governance Act 2020. Guidance on temporary changes to Companies House filing requirements Ireland – All Companies Ireland’s Companies Registration Office (CRO) published (15 April 2020) an update on services available for companies in relation to several company secretarial requirements, e.g. official document submissions, electronic filing, etc., and where to direct any queries. CRO–Update on Services Available Ireland – All Companies The Office of the Director of Corporate Enforcement (ODCE) published as part of their FAQ’s, a reminder that company directors continue to have statutory duties under Companies Act 2014. The ODCE indicate that where genuine efforts to comply with the Companies Act 2014 have been made and can be evidenced, the ODCE will have regard to such efforts in determining whether enforcement action is appropriate. ODCE FAQ Ireland – All organisations The Department of Business, Enterprise and Innovation issued protocols designed to support employers and workers to put measures in place that will prevent the spread of COVID-19 in the workplace when the economy begins to slowly open up. Return to work safely protocol UK – Public Sector UK National Audit Office publish a guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19. Guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19 Ireland and UK – All organisations Organisation for Economic Co-operation and Development (OECD) publishes policy measures to consider in order to avoid corruption and bribery in the COVID-19 response and recovery. Policy measures to avoid corruption and bribery in the COVID-19 response and recovery From professional bodies/organisations   Ireland and UK – Financial Reporting Chartered Accountants Ireland have assembled some information relating to the financial reporting implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors. Financial reporting implications of Covid-19 Ireland and UK – Statutory Audit Chartered Accountants Ireland have assembled some information relating to the audit implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors. Audit implications of Covid-19 UK – All organisations Chartered Institute of Personnel and Development (CIPD) collated guidance and protocols issued from the UK Government on returning safely to the workplace. Covid-19: Returning to the workplace Ireland and UK – All companies ICAS and ICAEW publish SME guidance on going concern. Directors are required to assess whether the business is a going concern when drawing up their annual accounts, and this should cover a period of at least 12 months from the date of approval of the accounts. Coronavirus has had a dramatic change on the performance and prospects of many businesses, leaving some under threat, and accounts will have to reflect its impact. This guidance is designed for owners and directors of SMEs to assess the prospects of their business in the wake of COVID-19. Covid-19 and Going Concern Guidance for Directors of SMEs Ireland and UK – All organisations ICAEW have published a short article titled “Assets and values – the fall-out from COVID-19”. It offers a viewpoint on valuing assets in the COVID and post-COVID environments and how it will engender more questions than answers, especially given the impact of various government interventions on returns. It is a useful thought-provoking article for Boards and Directors that may be assessing the value of assets in their organisations. Assets and values – the fall-out from COVID-19 Ireland and UK – Audit Committees International Federation of Accountants (IFAC) and Institute of Internal Auditors (IIA) produced an insightful article on Implications for Audit Committees Arising from COVID-19. Implications for Audit Committees Arising from COVID-19 UK – AGM’s Annual General Meetings (AGMs) UK: Guidance issued on guidance on Annual General Meetings (AGMs) in the UK and impact of Covid-19. The guidance was produced by law firm Slaughter and May and The Chartered Governance Institute, with the support of the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance. Covid-19 AGM Guidance UK Note update re Corporate Insolvency and Governance Act 2020: FRC AGM guidance Ireland – AGMs and other company secretarial matters Annual General Meetings (AGMs) Republic of Ireland: Specific requirements under Companies Act 2014 and the organisations own constitution need to be considered in respect of holding AGMs (virtually or physically, in or outside the state, etc.), notifications to members, resolutions required, etc. The Chartered Governance Institute have collated several sources of guidance on AGMs in Republic of Ireland. Covid-19 AGM Guidance ROI Ireland and UK – all organisations Articles and other resources to assist boards and their advisors are available on Chartered Accountants Ireland’s Governance Resource Centre and Webinars microsite Governance Resource Centre   Webinars Ireland and UK – all organisations Webinar: Responding to COVID-19: Advice to Boards and Organisations (Thriving in Uncertainty). Advice to boards and organisations Ireland and UK – all organisations Webinar: How Boards Operate in Times of Uncertainty (including useful company secretarial insights and advice). How boards operate in uncertainty Ireland and UK – all organisations Governance Webcast Series: Ten-minute interviews with CEOs, executives, non-executives and key business advisors on experience to date and advice on dealing with Covid-19 crisis. Governance webcast series UK – all organisations Article summarising key corporate governance aspects of Corporate Insolvency and Governance Act 2020. New Act updates Corporate Governance in Great Britain and Northern Ireland Ireland and UK – all organisations Accountancy Europe published (20 March 2020) Coronavirus crisis: implications on reporting and auditing, exploring going concern, post balance sheet events reporting, impact on estimates and judgements and implications for the audit report. Coronavirus crisis: implications on reporting and auditing Ireland and UK – all organisations Accountancy Europe published (27 March 2020) five key steps for accountants to guide Small to Medium Sized Enterprises (SMEs) through the crisis. This is a useful read in context of SME governance. Accountancy Europe 5 key steps for SMEs Ireland and UK – all organisations Accountancy Europe published (10 April 2020) an overview of EU country responses to the implications of the coronavirus on reporting including going concern, key accounting standard considerations, filing deadlines and more. Note: article also references Chartered Accountants Ireland’s Covid-19 guidance for boards and corporate governance. Coronavirus crisis: country responses to the implications on reporting Ireland – Funds Industry The Irish Funds Association (Irish Funds) have published an online repository of announcements, updates and guidance on Covid-19 implications for the funds industry. Irish Funds Covid-19 online resources Ireland and UK – all organisations The Institute of Risk Management (IRM) published an online support page outlining some risk considerations for business and risk managers during the Covid-19 crisis. In addition to some UK specific references the risk considerations for organisations outlined and additional resources provided are relevant to organisations in Ireland and UK. Risk considerations for business during the Covid-19 crisis Other related information   Ireland - Charities Ireland’s national association of community and voluntary organisations, charities and social enterprises, The Wheel, have compiled details of several fundraising resources for Irish non-profits and community groups. Fundraising information and resources for non-profits during Covid-19 Northern Ireland - Charities Northern Ireland Council for Voluntary Action (NICVA) have published an online Covid-19 information hub providing supports and advice to the voluntary and community sector on coping with the crisis. NICVA Covid-19 Information Hub Ireland and UK – All organisations Financial Executives International (FEI) publish insights to how ESG issues are being discussed in the boardroom amid the COVID-19 pandemic ESG in the boardroom amid COVID-19 Crisis.   Last updated on 6 July 2020.