Cartoon – Importance of Transparency
Category Archives: Transparency
Nearly 30,000 nursing home residents died during coronavirus pandemic, government report shows
About one in five homes reported a death but about 20 percent of nursing homes have not yet reported case counts.
The tally, however, is incomplete. About 20 percent of the nation’s nursing homes did not report data to the federal government. The Centers for Medicare and Medicaid Services on Monday said early analysis shows homes with a history of infection-control and other health deficiencies were more likely to have covid-19 outbreaks.
Early analysis shows that facilities with a one-star quality rating were more likely to have large numbers of COVID-19 cases than facilities with a five-star quality rating. CMS will take enforcement action against the nursing homes that have not reported data into the CDC as required under CMS participation requirements.
Health Equity Principles for State and Local Leaders in Responding to, Reopening and Recovering from COVID-19
“Health equity means that everyone has a fair and just opportunity to be as healthy as possible. This requires removing obstacles to health such as poverty, discrimination, and their consequences, including powerlessness and lack of access to good jobs with fair pay, quality education and housing, safe environments, and health care.”
COVID-19 has unleashed a dual threat to health equity in the United States: a pandemic that has sickened millions and killed tens of thousands and counting, and an economic downturn that has resulted in tens of millions of people losing jobs—the highest numbers since the Great Depression. The COVID pandemic underscores that:
- Our health is inextricably linked to that of our neighbors, family members, child- and adult-care providers, co-workers, school teachers, delivery service people, grocery store clerks, factory workers, and first responders, among others;
- Our current health care, public health, and economic systems do not adequately or equitably protect our well-being as a nation; and
- Every community is experiencing harm, though certain groups are suffering disproportionately, including people of color, workers with low incomes, and people living in places that were already struggling financially before the economic downturn.
For communities and their residents to recover fully and fairly, state and local leaders should consider the following health equity principles in designing and implementing their responses. These principles are not a detailed public health guide for responding to the pandemic or reopening the economy, but rather a compass that continually points leaders toward an equitable and lasting recovery.
Pandemics and economic recessions exacerbate disparities that ultimately hurt us all. Therefore, state and local leaders cannot design equitable response and recovery strategies without monitoring COVID’s impacts among socially and economically marginalized groups.¹ Data disaggregation should follow best practices and extend not only to public health data on COVID cases, hospitalizations, and fatalities, but also to: measures of access to testing, treatment, personal protective equipment (PPE), and safe places to isolate when sick; receipt of social and economic supports; and the downstream consequences of COVID on well-being, ranging from housing instability to food insecurity.
Geographic identifiers would allow leaders and the public to understand the interplay between place and social factors, as counties with large black populations account for more than half of all COVID deaths, and rural communities and post-industrial cities generally fare worse in economic downturns. Legal mandates for data disaggregation are proliferating, but 11 states are still not reporting COVID deaths by race; 16 are not reporting by gender; and 26 are not reporting based on congregate living status (e.g., nursing homes, jails). Only three are reporting testing data by race and ethnicity.
While states and cities can do more, the federal government should also support data disaggregation through funding and national standards.
Our communities are stronger, more stable, and more prosperous when every person, including the most disadvantaged residents, is healthy and financially secure. Throughout the response and recovery, state and local leaders should ask: Are we making sure that people facing the greatest risks have access to PPE, testing and treatment, stable housing, and a way to support their families? And, are we creating ways for residents—particularly those hardest hit—to meaningfully participate in and shape the government’s recovery strategy?
Accordingly, policymakers should create space for leaders from these communities to be at decision-making tables and should regularly consult with community-based organizations that can identify barriers to accessing health and social services, lift up grassroots solutions, and disseminate public health guidance in culturally and linguistically appropriate ways. For example, they could recommend trusted, accessible locations for new testing sites and advise on how to diversify the pool of contact tracers, who will be crucial to tamping down the spread of infection in reopened communities. They could also collaborate with government leaders to ensure that all people who are infected with coronavirus (or exposed to someone infected) have a safe, secure, and acceptable place to isolate or quarantine for 14 days. Key partners could include community health centers, small business associations, community organizing groups, and workers’ rights organizations, among others. Ultimately, state and local leaders should measure the success of their response based not only on total death counts and aggregate economic impacts but also on the health and social outcomes of the most marginalized.
Establish and empower teams dedicated to promoting racial equity in response and recovery efforts.
Race or ethnicity should not determine anyone’s opportunity for good health or social well-being, but, as COVID has shown, we are far from this goal. People of color are more likely to be front-line workers, to live in dense or overcrowded housing, to lack health insurance, and to experience chronic diseases linked to unhealthy environments and structural racism. Therefore, state and local leaders should empower dedicated teams to address COVID-related racial disparities, as several leaders, Republican and Democrat, have already done.
To be effective, these entities should: include leaders of color from community, corporate, academic, and philanthropic sectors; be integrated as key members of the broader public health and economic recovery efforts; and be accountable to the public. These teams should foster collaboration between state, local, and tribal governments to assist Native communities; anticipate and mitigate negative consequences of current response strategies, such as bias in enforcement of public health guidelines; address racial discrimination within the health care system; and ensure access to tailored mental health services for people of color and immigrants who are experiencing added trauma, stigma, and fear. Ultimately, resources matter. State and local leaders must ensure that critical health and social supports are distributed fairly, proportionate to need, and free of undue restrictions to meet the needs of all groups, including black, Latino, Asian, and Indigenous communities.
Proactively identify and address existing policy gaps while advocating for further federal support.
The Congressional response to COVID has been historic in its scope and speed, but significant gaps remain. Additional federal resources are needed for a broad range of health and social services, along with fiscal relief for states and communities facing historically large budget deficits due to COVID. Despite these challenges, state and local leaders must still find ways to take targeted policy actions. The following questions can help guide their response.
Who is left out?Inclusion of all populations will strengthen the public health response and lessen the pandemic’s economic fallout for all of society, but federal actions to date have not included all who have been severely harmed by the pandemic. As a result, many states and communities have sought to fill gaps in eviction protections and paid sick and caregiving leave. Others are extending support to undocumented immigrants and mixed-status families through public-private partnerships, faith-based charities, and community-led mutual aid systems. Vital health care providers, including safety net hospitals and Indian Health Service facilities, have also been disadvantaged and need targeted support.
Will protections last long enough?Many programs, such as expanded Medicaid funding, are tied to the federal declaration of a public health emergency, which will likely end before the economic crisis does. Other policies, like enhanced unemployment insurance and mortgage relief, are set to expire on arbitrary dates. And still others, such as stimulus checks, were one-time payments. Instead, policy extensions should be tied to the extent of COVID infection in a state or community (or its anticipated spread) and/or to broader economic measures such as unemployment. This is particularly important as communities will likely experience re-openings and closings over the next six to 12 months as COVID reemerges.
Have programs that meet urgent needs been fully and fairly implemented?Allexisting federal resources should be used in a time of great need. For example, additional states should adopt provisions that would allow families with school-age children to receive added Supplemental Nutrition Assistance Program (SNAP) benefits, and more communities need innovative solutions to provide meals to young children who relied on schools or child care providers for breakfast and lunch. States should also revise eligibility, enrollment, and recertification processes that deter Medicaid use by children, pregnant women, and lawfully residing immigrants.
Invest in strengthening public health, health care, and social infrastructure to foster resilience.
Health, public health, and social infrastructure are critical for recovery and for our survival of the next pandemic, severe weather event, or economic downturn. A comprehensive public health system is the first line of defense for rural, tribal, and urban communities. While a sizable federal reinvestment in public health is needed, states and communities must also reverse steady cuts to the public health workforce and laboratory and data systems.
Everyone in this country should have paid sick and family leave to care for themselves and loved ones; comprehensive health insurance to ensure access to care when sick and to protect against medical debt; and jobs and social supports that enable families to meet their basic needs and invest in the future. As millions are projected to lose employer-sponsored health insurance, Medicaid expansion becomes increasingly vital for its proven ability to boost health, reduce disparities, and provide a strong return on investment. In the longer term, policies such as earned income tax credits and wage increases for low-wage workers can help secure economic opportunity and health for all. Finally, states and communities should invest in affordable, accessible high-speed internet, which is crucial to ensuring that everyone—not just the most privileged among us—is informed, connected to schools and jobs, and engaged civically.
These principles can guide our nation toward an equitable response and recovery and help sow the seeds of long-term, transformative change. States and cities have begun imagining and, in some cases, advancing toward this vision, putting a down payment on a fair and just future in which health equity is a reality. Returning to the ways things were is not an option.
Trump: U.S. will terminate relationship with the World Health Organization in wake of Covid-19 pandemic
President Trump said Friday the U.S. would halt its funding of the World Health Organization and pull out of the agency, accusing it of protecting China as the coronavirus pandemic took off. The move has alarmed health experts, who say the decision will undermine efforts to improve the health of people around the world.
In an address in the Rose Garden, Trump said the WHO had not made reforms that he said would have helped the global health agency stop the coronavirus from spreading around the world.
“We will be today terminating our relationship with the World Health Organization and redirecting those funds to other worldwide and deserving urgent global public health needs,” Trump said. “The world needs answers from China on the virus.”
It’s not immediately clear whether the president can fully withdraw U.S. funding for the WHO without an act of Congress, which typically controls all federal government spending. Democratic lawmakers have argued that doing so would be illegal, and House Speaker Nancy Pelosi threatened last month that such a move would be “swiftly challenged.”
The United States has provided roughly 15% of the WHO’s total funding over its current two-year budget period.
The WHO has repeatedly said it was committed to a review of its response, but after the pandemic had ebbed. Last month, Robert Redfield, the director of the Centers for Disease Control and Prevention, also said the “postmortem” on the pandemic should wait until the emergency was over.
As the Trump administration’s response to pandemic has come under greater scrutiny, with testing problems and a lack of coordination in deploying necessary supplies, Trump has sought to cast further blame on China and the WHO for failing to snuff out the spread when the virus was centered in China.
During his remarks, Trump alleged, without evidence, that China pressured WHO to mislead the world about the virus. Experts say that if the U.S. leaves the WHO, the influence of China will only grow.
“The world is now suffering as a result of the malfeasance of the Chinese government,” Trump said. “China’s coverup of the Wuhan virus allowed the disease to spread all over the world, instigating a global pandemic that has cost more than 100,000 American lives, and over a million lives worldwide.” (That last claim is not true; globally, there have been about 360,000 confirmed deaths from Covid-19, the disease caused by the coronavirus.)
When Trump earlier this month threatened to yank U.S. funding in a letter, Tedros Adhanom Ghebreyesus, the WHO director-general, would only say during a media briefing that the agency was reviewing it. But he and other officials stressed that the agency had a small budget — about $2.3 billion every year — relative to the impact the agency had and what it was expected to do.
Mike Ryan, head of the WHO’s emergencies program, said the U.S. funding provided the largest proportion of that program’s budget.
“So my concerns today are both for our program and … working on how we improve our funding base for WHO’s core budget,” Ryan said. “Replacing those life-saving funds for front-line health services to some of the most difficult places in the world — we’ll obviously have to work with other partners to ensure those funds can still flow. So this is going to have major implications for delivering essential health services to some of the most vulnerable people in the world and we trust that other donors will if necessary step in to fill that gap.”
Over 500 Employees Of A Tyson Pork Processing Plant In Iowa Test Positive For Coronavirus
TOPLINE
Coronavirus has swept through a Tyson pork processing plant in Storm Lake, Iowa, with 555 employees of 2,517 testing positive, fueling renewed concerns over safety measures at meatpacking plants.
KEY FACTS
On Wednesday, with suspicions the plant was the site of a new outbreak, Iowa’s Department of Public Health Deputy Director Sarah Reisetter said the state would only confirm outbreaks at businesses where 10% of employees test positive and only if the news media inquires about them specifically.
According to the Des Moines Register, cases in Buena Vista County more than doubled on Tuesday, and Reisetter is now confirming around 22% of the employees at the Storm Lake facility tested positive.
“We’ve determined confirming outbreaks at businesses is only necessary when the employment setting constitutes a high-risk environment for the potential of Covid-19 transmission,” Reisetter added.
On April 28, President Trump signed an executive order using the authority of the Defense Production Act to compel meat processing plants to remain open, but it hasn’t stopped facilities from shuttering to address low staffing and safety issues.
Tyson was previously forced to shut down its largest pork processing facility, located in Waterloo, Iowa, on April 22 following a number of coronavirus cases stemming from the plant, as well as worker absenteeism.
Other meatpacking facilities across the state have also been forced to address outbreaks, including plants owned by Smithfield Foods and JBS.
CHIEF CRITICS
State lawmakers and mayors in Iowa have complained about not getting information about the ongoing situations at meatpacking facilities until it’s too late. Sioux City Mayor Bob Scott said because Tyson isn’t based in the state, they don’t need to report numbers to them. Iowa Rep. Ras Smith criticized Governor Kim Reynolds and the Department of Health’s stance on the delays in reporting numbers.
KEY BACKGROUND
Food processing facilities have been the site of numerous outbreaks around the country, with Trump pushing for them to remain open amid fears of food shortages. Earlier in May, the United Food and Commercial Workers International Union, the largest meatpacking workers union, derided Trump’s executive order, saying that since its signing, “The administration has failed to take the urgent action needed to enact clear and enforceable safety standards at these meatpacking plants.” There are 18,524 confirmed cases of the coronavirus in Iowa.
As the 1918 Flu Emerged, Cover-Up and Denial Helped It Spread
Nations fighting in World War I were reluctant to report their flu outbreaks.
“Spanish flu” has been used to describe the flu pandemic of 1918 and 1919 and the name suggests the outbreak started in Spain. But the term is actually a misnomer and points to a key fact: nations involved in World War I didn’t accurately report their flu outbreaks.
Spain remained neutral throughout World War I and its press freely reported its flu cases, including when the Spanish king Alfonso XIII contracted it in the spring of 1918. This led to the misperception that the flu had originated or was at its worst in Spain.
“Basically, it gets called the ‘Spanish flu’ because the Spanish media did their job,” says Lora Vogt, curator of education at the National WWI Museum and Memorial in Kansas City, Missouri. In Great Britain and the United States—which has a long history of blaming other countries for disease—the outbreak was also known as the “Spanish grip” or “Spanish Lady.”
Historians aren’t actually sure where the 1918 flu strain began, but the first recorded cases were at a U.S. Army camp in Kansas in March 1918. By the end of 1919, it had infected up to a third of the world’s population and killed some 50 million people. It was the worst flu pandemic in recorded history, and it was likely exacerbated by a combination of censorship, skepticism and denial among warring nations.
“The viruses don’t care where they come from, they just love taking advantage of wartime censorship,” says Carol R. Byerly, author of Fever of War: The Influenza Epidemic in the U.S. Army during World War I. “Censorship is very dangerous during a pandemic.”
The Flu in Europe
Patients lie in an influenza ward at the U.S. Army Camp Hospital No. 45 in Aix-les-Baines, France, during World War I.
Corbis/Getty Images
When the flu broke out in 1918, wartime press censorship was more entrenched in European countries because Europe had been fighting since 1914, while the United States had only entered the war in 1917. It’s hard to know the scope of this censorship, since the most effective way to cover something up is to not leave publicly-accessible records of its suppression. Discovering the impact of censorship is also complicated by the fact that when governments pass censorship laws, people often censor themselves out of fear of breaking the law.
In Great Britain, which fought for the Allied Powers, “the Defense of the Realm Act was used to a certain extent to suppress…news stories that might be a threat to national morale,” says Catharine Arnold, author of Pandemic 1918: Eyewitness Accounts from the Greatest Medical Holocaust in Modern History. “The government can slam what’s called a D-Notice on [a news story]—‘D’ for Defense—and it means it can’t be published because it’s not in the national interest.”
Both newspapers and public officials claimed during the flu’s first wave in the spring and early summer of 1918 that it wasn’t a serious threat. The Illustrated London News wrote that the 1918 flu was “so mild as to show that the original virus is becoming attenuated by frequent transmission.” Sir Arthur Newsholme, chief medical officer of the British Local Government Board, suggested it was unpatriotic to be concerned with the flu rather than the war, Arnold says.
The flu’s second wave, which began in late summer and worsened that fall, was far deadlier. Even so, warring nations continued to try to hide it. In August, the interior minister of Italy—another Allied Power—denied reports of the flu’s spread. In September, British officials and newspaper barons suppressed news that the prime minister had caught the flu while on a morale-boosting trip to Manchester. Instead, the Manchester Guardian explained his extended stay in the city by claiming he’d caught a “severe chill” in a rainstorm.
Warring nations covered up the flu to protect morale among their own citizens and soldiers, but also because they didn’t want enemy nations to know they were suffering an outbreak. The flu devastated General Erich Ludendorff’s German troops so badly that he had to put off his last offensive. The general, whose empire fought for the Central Powers, was anxious to hide his troops’ flu outbreaks from the opposing Allied Powers.
“Ludendorff is famous for observing [flu outbreaks among soldiers] and saying, oh my god this is the end of the war,” Byerly says. “His soldiers are getting influenza and he doesn’t want anybody to know, because then the French could attack him.”
The Pandemic in the United States
Patients at U. S. Army Hospital No. 30 at a movie wear masks because of an influenza epidemic.
The National Library of Medicine
The United States entered WWI as an Allied Power in April 1917. A little over a year later, it passed the 1918 Sedition Act, which made it a crime to say anything the government perceived as harming the country or the war effort. Again, it’s difficult to know the extent to which the government may have used this to silence reports of the flu, or the extent to which newspapers self-censored for fear of retribution. Whatever the motivation, some U.S. newspapers downplayed the risk of the flu or the extent of its spread.
In anticipation of Philadelphia’s “Liberty Loan March” in September, doctors tried to use the press to warn citizens that it was unsafe. Yet city newspaper editors refused to run articles or print doctors’ letters about their concerns. In addition to trying to warn the public through the press, doctors had also unsuccessfully tried to convince Philadelphia’s public health director to cancel the march.
The war bonds fundraiser drew several thousand people, creating the perfect place for the virus to spread. Over the next four weeks, the flu killed 12,191 people in Philadelphia.
Similarly, many U.S. military and government officials downplayed the flu or declined to implement health measures that would help slow its spread. Byerly says the Army’s medical department recognized the threat the flu posed to the troops and urged officials to stop troop transports, halt the draft and quarantine soldiers; but they faced resistance from the line command, the War Department and President Woodrow Wilson.
Wilson’s administration eventually responded to their pleas by suspending one draft and reducing the occupancy on troop ships by 15 percent, but other than that it didn’t take the extensive measures medical workers recommended. General Peyton March successfully convinced Wilson that the U.S. should not stop the transports, and as a result, soldiers continued to get sick. By the end of the year, about 45,000 U.S. Army soldiers had died from the flu.
The pandemic was so devastating among WWI nations that some historians have suggested the flu hastened the end of the war. The nations declared armistice on November 11 amid the pandemic’s worst wave.
In April 1919, the flu even disrupted the Paris Peace Conference when President Wilson came down with a debilitating case. As when the British prime minister had contracted the flu back in September, Wilson’s administration hid the news from the public. His personal doctor instead told the press the president had caught a cold from the Paris rain.
McLaren Health Care’s too secretive about finances, PPE, Michigan nurse union says
Ten nurse unions in Michigan are accusing McLaren Health Care of not being transparent about its finances and personal protective equipment supply during the COVID-19 pandemic, but the health system said it has shared some of that information.
Many of the nurse unions have filed unfair labor practice charges with the National Labor Relations Board, alleging that by not sharing information with front-line healthcare workers the Grand Blanc, Mich.-based health system is violating federal labor law, a media release from the Michigan Nurses Association states.
According to the association, each of its 10 unions received a letter from the health system May 15, in which the system refused to divulge how much funding it received in federal COVID-19 grants. The health system also has refused to provide details about its protective gear inventory, the unions allege.
“The fact that they won’t share basic financial information with those of us working on the front lines makes you wonder if they have something to hide,” said Christie Serniak, a nurse at McLaren Central Michigan hospital in Mount Pleasant and president of the Michigan Nurses Association affiliate.
But the health system maintains it has been transparent and has worked with labor unions and bargaining units across the system since the beginning of the coronavirus pandemic.
“We’ve openly shared information about our operations, the challenges of restrictions on elective procedures, our plans for managing influxes of patients and our supplies of personal protective equipment,” Shela Khan Monroe, vice president of labor and employment relations at McLaren Health Care told Becker’s Hospital Review.
Ms. Khan Monroe said that the information has been shared through weekly meetings, departmental meetings and several union negotiation sessions over the last two months.
The unions also say that the health system has not offered its workers hazard pay or COVID-19 paid leave that is on par with other systems. They say that only workers who test positive for COVID-19 can take additional paid time off.
In a written statement, McLaren disputed the union’s claims about employee leave, saying that employees “dealing with child care and other COVID-related family matters” can take time off to care for loved ones.
McLaren did not specify if this time off is paid. Becker’s has reached out for clarification and will update the article once more information is available.
“We have negotiations pending with several of the unions involved in the coalition, and while we are deeply disappointed in these recent tactics, we will continue to work towards productive outcomes for all concerned,” said Ms. Khan Monroe.
Recently, a coalition of unions urged McLaren Health Care executives to reduce their own salaries before laying off employees.
Employers seeking a “source of truth” for coronavirus guidance
https://mailchi.mp/f2774a4ad1ea/the-weekly-gist-may-22-2020?e=d1e747d2d8
As states begin to reopen, employers need guidance to ensure safe, COVID-free operations, and are beginning to call local health systems for advice on how to manage this daunting task. Providing this support is uncharted territory for most systems, and they’re learning on the fly as they bring back shuttered outpatient services and surgery centers themselves. This week we convened leaders from across our Gist Healthcare membership to share ideas on how to assist employers in bringing businesses safely back online—and to discuss whether the pandemic might create broader opportunities for working with the employer community.
It’s no surprise some companies are hoping that providers can step in to test their full workforce, but as several systems shared, “Even if we thought that was the right plan, testing supplies and PPE are still too limited for us to deliver on it now.” Better to support businesses in creating comprehensive screening strategies (with some offering their own app-based solutions), coupled with a testing plan for symptomatic employees.
Health systems have been surprised by the hunger for information on COVID-19 among the business community. Hundreds of companies have registered for informational webinars, hosted by systems through their local chambers of commerce. They’re excited to receive distilled information on local COVID-19 impact and response. As one leader said, the system isn’t really creating new educational content, but rather summarizing and synthesizing CDC, state and local guidance.
Business leaders are looking for “a source of truth” from their local health system amid conflicting guidelines and media reports. Case in point: employers are asking about the need for antibody testing, having been approached by testing vendors and feeling pressure from employees. Guidance from system doctors provides a plain-spoken interpretation on testing utility (great for looking at a population, meaningless right now for an individual), and helps them make smarter decisions and educate their workforce.
Health systems are hopeful that helping employers through the coronavirus crisis will lay the foundation for longer-term partnerships with employers, allowing them to continue to provide benefits through lower cost, coordinated care and network options.
Timing is critical, and it may be smaller businesses that have the ability to change more quickly. Large companies have mostly locked in their benefits for 2021, whereas many mid-market businesses are looking for alternative options now.
Worksite health, telemedicine, and direct primary care arrangements are all on the table. One system surveyed local brokers and employers and found that 20 percent of mid-market employers are open to narrow-network partnerships. “The number seems low,” they reported, “but it’s up from five percent last year, a huge jump.” For systems seeking direct partnerships with employers, there’s a window of opportunity right now to find those businesses committed to continuing to offer benefits, who are looking for a creative, local alternative—and to get that first Zoom meeting on the calendar.
How the CFO enables the board’s success—during COVID-19 and beyond
Two board experts explain how in times of crisis or transformation, the CFO can serve as a rock in the boardroom, a critical arbiter of difficult decisions, and a scout for the future.
Critical business decisions cannot be made unless management teams and boards of directors are on the same page. Transparency, fair and balanced dialogue, and well-structured processes for gaining agreement on strategic plans—these dynamics must be present in every boardroom, in good times and, especially, in bad.
The CFO plays an important role in ensuring that they are.
In crises, such as the global spread of the novel coronavirus, the CFO is best-positioned to provide the most relevant and up-to-date facts and figures, which can help boards find clarity amid chaos. In corporate transformations, the pragmatic, data-focused finance leader is the only one who can prompt the board to actively consider all the short- and long-term consequences of proposed strategy decisions.
Barbara Kux and Rick Haythornthwaite, longtime board directors for multiple global organizations, shared these and other board-related insights with McKinsey senior partner Vivian Hunt in a conversation that spanned two occasions: a gathering of CFOs in London some months ago and, more recently, follow-up phone conversations about the COVID-19 pandemic.
These interviews, which have been condensed and edited here, explained the importance of finance leaders in serving both as scouts for the future and as trusted translators of critical market information.
Shaping the COVID-19 crisis response and recovery
Rick Haythornthwaite: The board’s most important functions in the wake of COVID-19 are threefold: one is making sure that employees are being treated decently and that the company is taking all the precautions it can. Second is obtaining an objective, insightful understanding of the business and trends. And third is anticipating and preparing for recovery. The key in all three areas is having high-quality data to inform the board’s decisions and to share with employees. Of course, getting data from a market in freefall is never easy. This is where you need CFOs to be absolutely on top of their game.
The board needs to know what is really happening to the top line, what short-term measures can be taken to preserve and boost cash, and all the actions you have to take during the early stage of such events to buy time. But the board must also have a handle on long-term issues.1 And now that we’re months into this crisis, people are starting to draw lessons from previous ones and bringing some historical data into board discussions. The CFO can use these data to construct hard-edge scenarios that prompt good conversations in the boardroom.
Barbara Kux: An important difference in the role of CFOs today, as compared with their role during the financial crisis in 2008, is that they need to simultaneously manage both short-term responsiveness and future recovery. The CFO must keep the ship floating through rough waters—safeguarding employees’ health, securing liquidity, monitoring cash flow and payment terms, ensuring the functioning of the supply chain, assessing effects on P&L and the balance sheet, reviewing customers’ and suppliers’ situations, and initiating cost-reduction programs. That is all very challenging indeed. But then the CFO must also serve as the ship’s scout—watching for key trends that are emerging or that have accelerated as a result of COVID-19, such as digitization and changes in consumer behavior.
The balance between opportunity and risk is being altered substantially for most companies. The CEO could be tempted to profit from immediate demands—“let’s make ventilators, let’s make disinfectants.” The CFO’s job, by contrast, is to point out the differences between quick-to-market options and long-term post-COVID-19 options. These post-COVID-19 options can be an important factor in motivating and engaging employees during these challenging times.
It is also important for the CFO to present the board with reports and pre-reads that paint the entire picture in an objective way, including potential scenarios for the future. That is the only way boards and senior management can take thoughtful and well-founded decisions—first for the recovery and then for a sustainable future for all stakeholders. The word “crisis” has two meanings, one being “danger” and the other being “chance.” Today’s CFO must consider both.
The word ‘crisis’ has two meanings, one being ‘danger’ and the other being ‘chance.’ Today’s CFO must consider both.
Shaping the general transformation agenda
Barbara Kux: Outside of crisis periods, studies by INSEAD and McKinsey show, boards spend more than two-thirds of their time on “housekeeping”—financial reporting, compliance, environment, health and safety issues, regulatory issues, and the like. Only about 20 percent is spent on strategy. It is very important for boards to get out of this “compliance cage,” as I call it, and really focus on sustainable value creation. I’m thinking of the board of a leading oil and gas company that did just that. It recognized the importance of sustainable business development early on. The company gained first-mover advantages by diversifying toward a green business, including investing in solar and battery technologies.
At the end of the day, the board is ultimately responsible for the strategy, and the CFO is best-positioned to support strategy discussions. The finance leader can serve as a neutral party among the members of the C-suite, synthesizing their transformation ideas, supplementing them with comprehensive quantitative and qualitative data, and then working with the CEO to bring it all back to the board. This is even more important today to respond to COVID-19–related challenges early on.
Rick Haythornthwaite: The biggest challenge for any CEO, CFO, or other senior leader is to institutionalize new ideas without sucking the life out of them. Each C-suite leader plays a different but important role in this regard. The CFO needs to give transformation initiatives structure and rigor, while the CEO is probably better suited to take on the motivational aspects—for instance, the context for change and definitions of success. The whole team creates the strategy map—the markets and products affected, changes in pricing, the execution plan. But the CFO needs to ensure that the financial and operational underpinnings are there. Even if they are not visible to every single part of the organization, the board can see them through the CFO.
‘Scouting for the future’
Barbara Kux: To serve as an effective scout, the CFO should establish nonfinancial KPIs, like net promoter and employee-engagement scores, that are critical for the future health and performance of the organization. CFOs should review the strategy process to see that risks and opportunities are being well-assessed. And they can raise the political antennae of the board—accessing global think tanks, for instance, to understand what’s going on in Washington, China, and other important regions or in the medical community. The CEO often is not the most long-term–focused person in the organization; we know this because our financial markets are still very much short-term oriented. The board has to be long-term oriented. The CFO, therefore, must maintain a good balance of both. That might mean introducing a lean-transformation program with a focus on short-term results while, at the same time, contributing to the definition and implementation of a sustainable strategy for the company to emerge strong from the COVID-19 pandemic.
Rick Haythornthwaite: Boards need CEOs who can handle multiple truths, who can be expansive in thinking, and who can live comfortably in the future and bring the company along for the ride. The CFO also needs to be a protagonist in the boardroom, but from a different base: you can’t move to the future until you are anchored in the present. The CFO provides that anchor. Having a balance between future and present, between CEO and CFO, is important. The board wants to feel that there is strategic momentum—but also that the company is not just heading off on a journey of delusion.
Daring to dissent
Barbara Kux: It is important for the CEO and CFO to get on well, but their relationship should not be too close. It is better for the CFO to be objective, even if that sometimes leads to constructive conflicts. At times the CEO defaults to presenting only the positive in the boardroom, which makes it harder for the CFO to play back a more objective story. But that is very much the role of CFOs. They need to raise those early warnings. As a board director, I feel better if the CFO sometimes states, “by the way, we are losing market share here.” It takes a great deal of self-assurance for the CFO to come into the boardroom and say something like that. An independent-minded CFO will always be transparent with the board. A good CEO will always strive to establish an open relationship with the CFO. It is important for the board to motivate this constructive behavior from both executives so it can truly understand what is going well or not so well.
An independent-minded CFO will always be transparent with the board. A good CEO will always strive to establish an open relationship with the CFO.
Leading constructive dialogues
Rick Haythornthwaite: The senior-management team should not be delivering full solutions to the board at the outset; there should be a period of questions and discussion. The boardroom should be the place for CFOs and boards to engage in the cut and thrust of examination and exploration, with thoughtful planning and framing of dialogues to ensure that decision making is of the highest possible quality.
I’ll give you an example. CFOs used to be able to put traditional capital cases in front of the board about things like investments in plant and equipment, and there was typically a well-grooved dialogue. The kinds of actions they are talking about have changed, though. Think about companies’ investments in platform technologies, which can involve large sums being paid for targets with very low EBITDA—the idea being that value will ultimately come from the combination of entities rather than from a singular target.
Boards may be unfamiliar with such investment cases, so rather than jumping into quick, instinctive type-one decisions forced by the imposition of inappropriate and probably unnecessary time constraints, they will need an education. The board must take time to understand what, in practice, the acquisition of a platform would look like—how it might be scaled under new ownership, how that scaling would affect the bottom line, any risks involved, and so on. This is fundamentally a type-two decision, requiring time and deliberation. The CFO has an important role to play in making sure that this process happens, that it plays out over several board sessions rather than being squeezed into one meeting, and that conversations are grounded in hard numbers.
In the wake of COVID-19, of course, these dialogues may need to happen virtually; the quality of the conversation will still be good, as people are becoming accustomed to virtual meetings.2 They are fine for certain pro-forma tasks, where the issues are well-understood and processes are well-established. But when you’re trying to bring in new voices and new ideas, that’s when you need to be together in the same room.
Growing into the role of change agent
Barbara Kux: The role of the CFO is so much more expansive than it was even five years ago, including additional responsibility for cyber and digital transformations and for IT initiatives. To get your arms around the role and grow in it, take a step back and look at the company objectively. “What other roles could I play in the company, and how does that overlap with what I am doing now?” “Which initiatives would make the most impact in the company, and how could I realize quick wins in those areas?” Maybe it’s a focus on digital or compliance or export control or political intelligence. The CFO’s professional response to COVID-19 crisis management could be a springboard for future development. Whatever it is, I would identify it and just start. Take any kind of training you can get; read as many business publications as you can. Train yourself in how to deal with activist investors. Step by step, your hat will become bigger.
Rick Haythornthwaite: Whether you are talking about COVID-19 or digital disruption or any other impact on the business, please remember that the board still wants to sleep at night, and when the details are lost, the board will be much less forgiving of CFOs than of CEOs. Don’t forget that part of it. Particularly in this challenging economic environment, it is very important. Chairs and boards? We like to sleep soundly at night.
As Trump Rails Against Voting by Mail, States Open the Door for It
Despite the president’s opposition, states are increasingly reducing barriers to what many see as the safest way to vote amid the pandemic.
By threatening online on Wednesday to withhold federal grants to Michigan and Nevada if those states send absentee ballots or applications to voters, President Trump has taken his latest stand against what is increasingly viewed as a necessary option for voting amid a pandemic.
What he hasn’t done is stop anyone from getting an absentee ballot.
In the face of a pandemic, what was already limited opposition to letting voters mail in their ballots has withered. Eleven of the 16 states that limit who can vote absentee have eased their election rules this spring to let anyone cast an absentee ballot in upcoming primary elections — and in some cases, in November as well. Another state, Texas, is fighting a court order to do so.
Four of those 11 states are mailing ballot applications to registered voters, just as Michigan and Nevada are doing. And that doesn’t count 34 other states and the District of Columbia that already allow anyone to cast an absentee ballot, including five states in which voting by mail is the preferred method by law.
“Every once in a while you get the president of the United States popping up and screaming against vote-by-mail, but states and both political parties are organizing their people for it,” said Michael Waldman, the president of the Brennan Center for Justice at New York University. “It’s a bizarre cognitive dissonance.”
Many of the states that have relaxed their rules have done so only for pending primary elections, leaving the possibility that they could choose not to do so in November. But that is highly unlikely, said Daniel A. Smith, a University of Florida political scientist and expert on mail ballots.
“The horse is out of the barn whether it’s primaries or the general election,” he said. “The optics are such that states will be under enormous pressure to continue to allow mail voting in the fall.”
Even as the president has offered support for some groups of absentee voters like older Americans and military serving abroad — and even as he votes absentee himself — Mr. Trump has regularly warned with no factual basis that allowing widespread voting by mail was a recipe for election theft. “You get thousands and thousands of people sitting in somebody’s living room, signing ballots all over the place,” Mr. Trump said at a White House briefing last month.
Despite ballot stuffing scandals in the nation’s past, and an absentee vote scandal involving Republicans in North Carolina in 2018, nothing remotely comparable has been documented in modern American politics or linked to voting by mail.
Still, some conservative advocacy groups have embraced Mr. Trump’s view, even going to court to block the expansion of absentee balloting during the pandemic. Republican-controlled legislatures in Louisiana and Oklahoma also have bridled at making voting easier. More legal battles ahead of the November election seem certain.
But in many other states, governments controlled by each of the political camps have moved in the other direction.
In lawsuits and elsewhere, voting-rights advocates and Democrats have taken aim at state rules on voting that they see as discriminatory. In Texas, a federal court ruled this week that a state regulation granting blanket absentee-ballot privileges to voters over 65 — a not-uncommon exception nationally — discriminated against younger voters.
Elsewhere, lawsuits have sought to expand a common exception allowing absentee voting by people too sick to go to the polls. The goal is to cover voters who fear catching the coronavirus while in line at a polling place. A number of states have adopted that view, ruling that voters who reasonably fear exposure to the virus have a right to vote remotely.
Jocelyn Benson, the Democratic secretary of state in Michigan, said this week that the state would mail applications for absentee ballots to all 7.7 million registered voters for both the August primary and the November general election. The Legislature in deeply Republican South Carolina expanded absentee voting rights last week as a lawsuit pressing that cause lay before the state’s Supreme Court.
In West Virginia, the Republican secretary of state sent absentee ballot applications last month to each of the state’s 1.2 million registered voters; so far, nearly one in five has asked to vote absentee.
And in Kentucky, Republicans and Democrats agreed three weeks ago on an emergency plan that allows any voter to request an absentee ballot online and submit it by mail or at drop-off points for two weeks before the state’s June 23 primary. Michael G. Adams, the Republican secretary of state, told National Public Radio last week that he had been excoriated by his party for mailing postcards to voters explaining the new rules.
“The biggest challenge I have right now is making the concept of absentee voting less toxic for Republicans,” said Mr. Adams, who won election on a platform underscoring the threat of voter fraud.
Many political analysts say they find that odd. Until now, the decade-long crusade by Republicans against voter fraud has focused largely on requiring ID cards at polling places, supposedly to counter the distant possibility that an impersonator might make it into a voting booth. Studies show that fraud among absentee voters, while still rare, is more common — but that those voters have tended to be both older and white, a demographic that favors Republicans and Mr. Trump.
“Before 2018, Republicans loved mail balloting,” Michael McDonald, a University of Florida political science professor and elections expert, said this week.
Mr. Trump said in March that Democrat-backed election proposals for expanded voting by mail would ensure that “you’d never have a Republican elected in this country again.” Indeed, many Republicans and Democrats alike believe that expanding mail voting would increase Democratic turnout.
Their reasoning is that many more absentee ballots have traditionally been cast by wealthier and more educated voters and expanding voting by mail would add more votes by the low-income and minority voters who tend to lean Democratic and have a harder time getting to polls on Election Day.
But both academic studies and changing demographics throw that into question. Under Mr. Trump, the Republican base has shifted greatly toward whites with less education, while wealthier suburbanites have become increasingly Democratic. Studies in states that use voting by mail indicate it does not favor either party.
And in any case, mail voting is increasingly the norm everywhere: In 2016, nearly one in four voters cast absentee or mail ballots, twice the share just 16 years ago, in 2004.
Mr. McDonald and a number of other experts argue that the greatest threat posed by a shift to voting by mail has nothing to do with fraud. Rather, they say, it is the very real prospect that a tsunami of mail votes could overwhelm both postal workers and election officials, creating a snarl in tallying and certifying votes that would allow a candidate to claim that late-counted votes were fraudulent.
Mr. Trump’s unfounded assertions that mail balloting in Michigan and Nevada encourage fraud suggest that he could be laying the ground for such an scenario, said Richard Hasen, an election law expert at the University of California, Irvine.
“I think he’s trying to undermine confidence in elections,” Mr. Hasen said, citing Mr. Trump’s claim in 2018 that close races for governor and the United States Senate were “massively infected” by fraud until Republican candidates, Ron DeSantis and Rick Scott, prevailed. “Maybe he’s not being conscious about what he’s doing. But he’s acting as if he has a plan.”
HENRY KOTULA 