The importance of global coordination in a pandemic

As forensic accountants, we like to say we have our boots on the ground as soon as a catastrophe strikes. We are able to do that with localized situations such as hurricanes, floods, and fires, quantifying losses that arise from a crisis in any situation. But what happens when a catastrophe impacts the entire world? COVID-19 is unique for all of us. No one has ever seen an event of this magnitude that has hit every aspect of business across the globe. The importance of having boots on the ground takes on a whole new meaning in a crisis this far-reaching, where both local knowledge and global understanding are key.

Local response

COVID-19 has elicited a complex patchwork of government response. Nearly every community within every country is facing a diverse range of issues, mostly driven by the many different responses and approaches taken by local government. The wording on government stay-at-home and business closing and re-opening orders differs not only by country, but in the U.S. it varies by state and sometimes even by city or county within a state. When and how a local government announces that businesses should close or reopen has a major impact on both business and supply chain operations, as well as consumer behavior. Understanding these local nuances is critical to gauging business interruption losses.

Supply chain

As many countries begin to re-open, we are seeing that COVID-19 has altered and, in many cases, taken down the global supply chain of nearly every business to some degree. Supply chains are complex and far reaching, with numerous moving pieces and multiple layers that need to line up. The reaction time is often slow because of these complexities, which is difficult when everyone wants, and needs, quick answers. And with reaction time slowed, it’s hard to plan for what might happen in a business interruption loss.

Businesses are completely shifting supply chain strategies as they try to mitigate their losses. In the early stages of the pandemic, businesses that relied heavily on China were severely impacted whereas those that sourced product from multiple locations and other regions were largely unaffected. Now that the pandemic has spread around the globe, it is difficult to find locations that are not impacted. A coordinated global network can provide the ability to anticipate supply chain issues, as well as quantifying and minimizing business interruption losses as they arise.

Government funding

Local knowledge is also important when it comes to government response and financial relief for businesses. The U.S. has the CARES Act, while other countries throughout the world have their own