Our Pandemic Disconnect

You can secure C-suite support for pandemic preparedness measures by showing the competitive advantages they offer.

• By Mike McGuire
• Nov 01, 2008

Despite the very real risk that an influenza pandemic poses to U.S. businesses, studies and anecdotal evidence show there’s a disconnect between risk managers and the Csuite that can make it difficult for pandemic preparedness to receive the attention—and funding—that it deserves. This article will present strategies and new developments that risk managers can leverage to help improve understanding among senior management about the value of comprehensive pandemic planning and to secure C-suite support.

The Challenge
The director general of the World Health Organization (WHO) has described an influenza pandemic as the single biggest public health threat to the globe in the 21st Century. Despite years of similar warnings from the WHO and other leading health experts, risk managers and emergency planners report that they continue to find it challenging to secure full buy-in for pandemic preparedness activities at the most senior levels of their companies.

According to an executive in the risk consulting practice at Marsh, “It’s difficult, cumbersome, and can be expensive” to implement enterprise risk management, which encompasses broader, more advanced initiatives such as pandemic planning.The results of the 2007 Chubb International Risk Survey showed risk managers felt that natural catastrophes posed the biggest risk to their overseas business operations, while C-level executives cited terrorism as the top threat.

Roche executives have met with hundreds of corporate emergency planners to discuss their pandemic plans, and we have heard this challenge raised many times. At a Roche-sponsored roundtable discussion for financial industry executives in August 2007, approximately half of the participants said their senior leadership considers pandemic flu an important—but not urgent—consideration.

The survey findings and the anecdotal input from planners illustrate the lingering disconnect that can make it difficult for business continuity professionals to secure the necessary approvals and financial support to implement their recommendations. This, of course, can stand in the way of optimizing preparedness.

Business continuity professionals can take steps to ensure the C-suite has a solid grasp on the pandemic threat and acknowledges what they can—and should— do to protect a company and its employees.

Closing the Gap with the C-Suite
As the maker of antiviral flu medication that is being stockpiled by governments and businesses for pandemic preparedness, Roche has a unique perspective and offers the following tips and tools, which may help risk managers make the business case for pandemic preparedness.

1. Package news to keep senior management informed. As you track new data, developments, and guidelines related to the pandemic threat, keep the C-suite updated, as well. Remember, for most people, pandemic flu is not top of mind. The lack of daily news about a potential pandemic may be contributing to the lack of urgency among senior execs. By packaging regular updates in an e-mail or newsletter, managers can demonstrate that they have a pulse on the emerging threats to the company.

Some types of information you might include:

WHO case updates. As of Sept. 10, 2008,WHO had confirmed 387 human cases of H5N1 avian flu and 245 deaths (a fatality rate of 63 percent).

New research findings. A May 2008 study in the Proceedings of the National Academy of Sciences journal reported that mild H7 bird flu strains circulating in North America are becoming more like human flu viruses in their ability to attach to human cells, which could signal that they’re becoming more likely to infect humans.

Expert commentary. In commenting on the study, noted infectious disease expert Dr. Michael Osterholm stated that “the most important message we can take from this is that there will be another pandemic strain that will emerge—tomorrow, next week, next year,whenever, but it’s going to occur.”While addressing member states at WHO’s annual general assembly in May, WHO Director General Margaret Chan stated that “the threat [of a pandemic] has by no means receded, and we would be very unwise to let down our guard, or slacken our preparedness measures.”

Government guidance. The fact that the U.S. government issues specific guidance almost weekly is probably not well known.The Department of Health and Human Services (HHS) recently issued guidance on corporate stockpiling of antiviral medications, pandemic vaccine allocation, and home health care response during a pandemic.

New business resources. A series of white papers for various industry sectors is available at www.ems-solutionsinc.com. In addition to hosting dozens of pandemic planning workshops for business leaders across the country, Roche recently introduced a program to facilitate corporate stockpiling of antivirals by offering companies greater flexibility. The program enables U.S. businesses to maintain access to their own stockpile of antiviral flu medication for use in a pandemic situation, with limited up-front investment and no risks of product expiration. GSK announced a similar plan for its inhaled antiviral medication a couple of months later.

2. Customize the financial risks for your company. Planners know the financial risks of being unprepared. According to a report released last year by the non-profit Trust for America’s Health, a severe flu pandemic could result in the second-worst recession in the United States since World War II.

Our increasingly global and agile supply chain puts the businesses that rely on it in a fragile financial position, especially considering the low inventory levels that most companies maintain. Supply chain disruptions are anticipated to be rampant during a pandemic for a multitude of reasons, including employee absenteeism at companies around the world and border closures as countries attempt to minimize the spread of flu to their citizens. Despite the risk that supply chain failures pose to businesses, few are prepared for them; a 2006 survey by AMR Research Inc. indicated only 33 percent of companies acknowledge they are prepared to keep supply chains moving in the event of a pandemic.

To take it to the next level, planners can customize information for their business by utilizing a tool like our Pandemic Influenza Antiviral Planning Model. It can help companies measure the economic impact of antiviral interventions on their individual businesses. By entering information specific to their enterprise (industry, number of employees, etc.), the model generates a graphic illustration of the estimated financial impact a mild, moderate, and severe pandemic would have on the business in terms of deaths, medical costs, and lost productivity.

3. Explain the potential for liability. By nature, pandemics are recurring events that are capable of causing great harm. Both of these characteristics create the legal grounds for companies to take reasonable steps to enhance their pandemic readiness.

A pandemic will create a variety of legal issues for the private sector, most notably related to labor and employment questions. Companies may also struggle to reconcile their contractual obligations with what they can realistically deliver to their customers while as much as 40 percent of their employees are absent. Perhaps most worrisome to senior management, however, will be the possibility that disgruntled shareholders may seek remedies at law against corporate boards and C-suite executives for losses that could have been avoided or diminished, had planning been better, they will claim.

While it may not be possible to avoid all legal problems, identifying them in advance and taking steps to minimize their impact could decrease the overall threat they present to the future success of the company. This information and much more about the legal risks of being unprepared for a pandemic can be found in a white paper, “The Microbiological Threat to Financial Institutions and the Global Economy,” which is available at the previously mentioned link.

4. Demonstrate the short-term benefits of pandemic preparedness. Investment in pandemic planning will reap clear returns and could create a variety of competitive advantages for companies. Pandemic planning supplements the business continuity work that has already been done and thus can make a company more resilient for any type of emergency.

Educating employees about personal hygiene measures that can help them avoid becoming infected during a pandemic (frequent hand washing, keeping hands away from the face, etc.) can decrease absenteeism from colds and seasonal flu. Companies that plan to protect employee health during a pandemic could experience an immediate ROI in terms of enhanced employee morale and commitment.

In addition, training and cross-training employees to step into certain roles will help companies identify high-potential talent, will enhance the decision-making skills of workers throughout the ranks of an organization, and can strengthen bonds between companies and employees by making workers feel valued and confident in their ability to deal with challenges. More information about the short-term benefits of pandemic planning is available in the previously mentioned white paper.

By embracing a broad, strategic approach to disaster planning, risk managers can have the satisfaction of seeing their plans implemented while also becoming a valued asset to the C-suite.

This article originally appeared in the November 2008 issue of Occupational Health & Safety.