The plight of companies in 2021 has been to contend with two difficulties. At the start of the coronavirus pandemic last year, some economies were already in a weak state. But the restrictions since imposed by governments to stop the spread of the virus have only made matters worse.
In the early stages of the pandemic, I coined the term “coronanomics”, to reflect how the economic and health crises were intertwined. Companies have been in survival mode and boards of directors around the world are only thinking short term — about how to avoid the liquidation of their businesses.
If a company were to be liquidated at this time, the sale of tangible assets would not achieve market value and human capital would be dispersed.
When we arrive at population immunity through global vaccination, economies will go back into thriving mode. For now, though, directors’ mindset must be one of integration, collaboration and compromise, and they must act accordingly in their relationship with stakeholders. Company directors have to understand the needs, interests and expectations of stakeholders and the hardships they have suffered during coronanomics. Likewise, stakeholders need to consider the challenges companies have had to deal with.
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