Preparing for the Unforeseen

The current crisis which we are all still facing has made us all re-consider many relevant aspects of our personal and professional lives. In case of personal lives, it is definitely a more personalized and self-centered process to pursue, but in case of businesses, this analyzing-process may raise endless discussions and dead-end paths. However, the general “feeling” and conclusions the businessmen/businesswomen have reached is that the business ecosystems should be governed by respect, confidence and reasonableness.

The following lines are meant to underline the struggle of the Romanian businesses to continue to pursue their objectives in these uncertain and unprecedented times. It is true that any improvement they intend to make should be compliant with the legal framework, more or less aligned to the UE legislation.

Following the discussions we had with our clients, as well as based on our own experience as entrepreneurs, we note below the main topics raised in the previous months and which continue to be the main titles of our e-mail threads or memoranda.

All of us deem necessary to think through (even if not in great details and applicable to all situations which we may not even imagine upfront) business continuity plans, practically, for all situations which are out-of-the-ordinary. 

This implies a complex analytical process. Thus, in order to do that, the businesses should carefully assess their activity (activity per se, supply chain, clients, side businesses etc.), their decision-making processes, their internal regulations and, if applicable, the collective bargaining agreement, the cyber security checks, in tight conjunction with privacy rules, organizational health and safety measures etc.

Most and foremost, such plans should relate to an emergency/crisis management steering committee constituted out of the main relevant persons/employees within the company, which are knowledgeable in their field of practice, as well as knowing in great details the insights of the company/department/section/unit. These people should be able to connect to a video-call or telephone conference at any time and from any place they are located, in case an emergency arises. By having a bunch of people readily available in any circumstances may bring a high level of confidence to the top management and stakeholders of the company. 

Such a committee should not bring further hurdles in the decision-making process, but it should be clear from the very beginning who is entitled to take which decision in critical moments.

Another aspect worth considering is the side businesses or complementary businesses, which we deem that every company should embrace not even in times of crisis. It is proven now that over-specializing (in any field and under any form) is not a path to be pursued in the future! We have seen clients that have flourished during these times, by swiftly switching to a side business which was optimal for crisis or who have lines of business complementary to their own business, so that they did not depend on other suppliers or costumers for obtaining or selling the products.

The work-from-home and telework require no further ado anymore, as they seem to be the chorus of nowadays work. We do not intend to analyze here the upsides and downsides of this type of work, but rather underline that any company should assess in advance whether WFH and TW is suitable for its activity and if yes, then relevant internal policies should be drafted by relevant departments, such as HR, IT, financial & tax etc. Such policies should set the main rules, main framework for carrying the work-from-home or telework.

Any company is now compelled (by the external circumstances) to implement remote means of communications for general meetings of shareholders and meetings of the board of directors. Many multinational corporations have already implemented such agile and flexible methods given the multinational structure of its corporate bodies and their actual locations. Now it’s time to move things forward even for small businesses! Besides the legal aspects, that move requires technical advice from IT specialists and investments in relevant infrastructure and devices. 

The WFH and TW, as well as remote meetings bring into play the necessity of using the electronic signature. Such an use should be decided internally and relevant policies should be adopted in this regard, considering that a qualified electronic signature may engage a company as an ink signature does. Professional advice should also be sought, since there are many types of signature with different legal effects or no effects at all.

The same model of work implies more awareness at the level of employees for cyber security, confidentiality of internal information and data privacy. These should be well-documented by internal policies, as well as by relevant obligations imposed individually to each concerned person. Bear in mind that these are really hot topics of the moment and should be treated with care and emergency!

Besides the above tips on how to further organize the business and the related activity, there are some practical aspects that have been under our radar. For instance, some of our clients become very interested in insurance policies which may cover situations like the one generated by Covid pandemic. Usually, the insurers tend to avoid these, but who knows, new times require new approaches and new insurance products.

Alternative source of funding is also on the top of our clients’ list, since the banks and other financial institutions tend to be very prudent and conservative in these times or increase the level of requirements for granting a credit. For instance, the lease-back or barter or supplier-credit seem to gain the momentum.

Furthermore, setting aside those actions falling within the area of competence of each business, we deem that also the authorities should join their forces and support the business environment. For instance, we deem that the courts of law should create more unitary practice/case law, so that to support the companies in their decision-making. We note the case of non-unitary practice related to the conditions imposed to employers for reducing the working schedule from 5 to 4 days per week. Absent clear legal provisions, some courts have imposed that 30 days of reduction of activity should pass before the employer may take such a decision, while others share the view that once the reduction of activity has arisen, then the employer may reduce the working schedule for at least 30 business days.

The lines above, as well as the tips included therein, are only of indicative nature, as many more aspects should be considered, on a case-by-case basis. A general guideline applies, though, namely that the professional advice (ranging from tax, financial, IT support, legal, health & safety etc.) is needed now more than ever, as any error may trigger bigger costs than in normal times, and they are not only pecuniary ones!