Amid temporary closures of manufacturing facilities and impacts to ports due to COVID-19 concerns, many companies are experiencing manufacturing and distribution challenges. As a result of these supply chain disruptions and the ensuing economic uncertainty, companies are understandably letting go of operational “nice to haves” in favor of focusing on business continuity initiatives.
However, for long-term operational success, it is important to recognize that corporate social responsibility and regulatory reporting obligations are not “nice to haves”, and letting standards slip, even temporarily, will make it more difficult to return to business as usual when disruptions have subsided.
Learning From the 2008 Economic Downturn
While some companies may be expecting a reprieve from their regulatory responsibilities as they look for ways to adapt, governments will not alter reporting deadlines (e.g. U.S. Securities and Exchange Commission conflict mineral filings will continue as scheduled), and the situation after the 2008 economic downturn would indicate that scrutiny is more likely to increase. At the time, non-governmental organizations increased pressure on businesses, evaluating how they reacted under pressure and highlighting that external forces do not change the need to protect workers in the supply chain.
The overarching question was: did companies uphold their policies in the face of adversity or did they drop the ball?
After the COVID-19 crisis, companies in the latter group will risk being named in investigative articles, resulting in reputational damage and stock price drops.
To ensure your company is in the former group when the dust settles, there are a few things you can do. First, make your compliance programs a priority. Second, continue to respect the treatment of workers and the environment despite your challenges. Third, document the actions you’re taking to ensure labor rights are respected in your supply chain and prepare a statement in the event of allegations.
Evaluating Suppliers & Setting Expectations
While it is likely not feasible to complete a formal, in-person audit of key suppliers at this time, think of ways to adapt your program to meet current limitations. For example, you can send your suppliers surveys to evaluate how they are responding. At this point, it is about setting expectations. If your suppliers understand that lapses in labor standards will not be tolerated, they will be less likely to accept violations in the name of continuity.
These expectations are set at the top. Senior leadership must buy into the importance of continuing compliance efforts and starting conversations about how to continue to be good corporate stewards.
Finding Information in the Chaos: Assent Can Help
Social distancing measures during the COVID-19 pandemic have resulted in the cancellation of key industry events, leaving companies that rely on the information presented at these events in the dark about regulatory changes. Additionally, conflicting information about impacts of the virus makes it more difficult for companies to determine how to proceed. As the global leader in supply chain data management, Assent is in regular contact with the organizations responsible for making decisions that impact regulatory requirements and is always ahead of industry trends. For more information about how Assent can help your company stay up to date, please contact us.