Culture plays the most significant role in risk management during a crisis, according to the chief risk officer of the nearly $4 billion super fund and investment manager.
Speaking over the phone for the Governance Institute of Australia's virtual governance and risk management forum, Australian Ethical Investments chief risk officer Karen Hughes implored companies to keep business culture alive during the COVID-19 crisis.
"Culture plays probably one of the most significant roles [in a crisis], it is probably the key role from my perspective," she said.
"People are your greatest asset, and they're an expensive asset as well, and we need to keep them motivated."
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To deal with the pandemic, employees need to see strong and effective leadership, as well as regular communication, Hughes said.
"It's equally important to communicate with your customers as your employees and directors, even if you've got nothing to say," she said.
"You've got to keep that culture alive and people are expecting leaders to communicate.
"When they're working from home, which all of our organisation is at the moment, they're in a vacuum - and so they need to feel connected."
She recommends management develop strategies for how employees can manage their mental health as well as their physical health.
"Whilst the business is important, it's also important to make sure that your people are strong and healthy," Hughes said.
Recognising everyone deals with a crisis differently is also of utmost importance, she said.
"The people that you expect to step up in a crisis will sometimes fall away, and those who you thought would probably succumb to fear or panic are usually the stronger ones and they'll step up and help more than ever," Hughes said.
"From a cultural perspective, it's important to actually understand how your employees are feeling and see if there's anything else that is needed to support them."
Australian Ethical has been checking-in on employees throughout the pandemic to track employee mental and physical health - to make sure that employees feel connected, she said, and a culture of honesty is maintained.
This is important so that when things go wrong, as they undoubtedly can in the current environment, employees come forward asking for help, Hughes said.
"One of our employees noticed something had happened and actually put their hand up and said look, something's gone wrong, we need to fix this, how can we fix this," she said.
"They didn't sweep it under the carpet, they didn't try to fix it themselves - I think from a risk culture perspective it's really important that people maintain those values of being open and honest.
"It's better to know that things aren't working properly [through an employee] than to find out by the media, social media or be contacted by your regulator."
In a highly regulated industry, it's important for businesses to be proactive and contact regulators themselves, Hughes said, and operate on a "no surprises basis".
"We are regulated by both APRA and ASIC, and from a prudential perspective and managing the risk, we proactively contacted APRA to advise them that we had activated our crisis management program," she said.
"We have a tool, which I'm assuming many people do as part of your business continuity plan, that assesses the risk levels to our business and reduces it.
"When the first signs of the virus were appearing and as it escalated, that tool helped us activate the crisis management team and then we contacted the regulator to provide them with an update about the actions that we were taking to ensure that they were fully informed."
It doesn't matter if you are contacting your regulators, employees, directors or customers, you need to communicate often, she said.
"It's really important to respond to their queries and in a timely manner; things like government announcement around early release of super, the market volatility that we've had, and liquidity concerns," Hughes said.
Also key to culture is being agile and flexible, Hughes said, arguing that the business landscape will be forever changed by the COVID-19 crisis.
"Things won't go back to normal, at least not for a while, and strategy and risk that you're managing need to be flexible and adaptable as you go forward," she said.
"Take your learning's from the current landscape or your changing priorities to work out what you want your business to look like when the economy returns to the new normal, because things won't be the same, and your risks won't necessarily be the same either."
Although most businesses would have a framework for risk management, Hughes argues it's important to actually educate your stakeholders and see strategies come to life.
"Risk management is not something that you create a framework for and put on the shelf, you actually need to see it come to life and it's the people aspect that, for me, is one of the greatest things that you need to educate," she said.
"Risk has always been involved in business, for forever and a day, but it's become this new word new buzzword if you like over the last few years and I think that people just need to reconnect with risk as it is."
Read our full COVID-19 news coverage and analysis here.