Here’s How Companies Are Serving Their Stakeholders During the Coronavirus Crisis

Over the last few weeks, companies have taken a range of actions to protect their workers, customers, and communities in response to the COVID-19 pandemic. Some companies have extended paid sick leave to frontline workers for the first time, others have deferred late payments on bills for customers, and others have donated to community relief funds. JUST Capital knows that companies face unprecedented operational and financial challenges and are making difficult decisions each day. In an effort to help corporate decision-makers we’ve identified 5 Principles to Help Guide Corporate America During the Coronavirus Crisis and created a comprehensive tracker of how the 100 largest U.S. public employers are responding to the coronavirus to help assess what’s happening on the ground. Below are several leading actions to elevate best practices and share what good looks like in this rapidly shifting landscape:

Principle One: Support Workers’ Health and Financial Security.

As companies grapple with the impacts of coronavirus, they should prioritize the health and financial security of all their workers, especially their low- and middle-wage workers, by providing paid sick leave and family leave, continuing to pay hourly and contract workers, and establishing hazard pay for workers who are on the frontlines of the global health crisis. 

Example of Action: Target

Target’s response to COVID-19 stands out as one leading example among its peers in the retail industry, in part for the range of policies and practices it has adopted to support its workers. So far, Target has:

• Established a COVID-19 paid sick leave policy, providing team members who are under quarantine or have COVID-19 with 14 days of paid sick leave. 
• Raised wages for its 300,000-plus frontline workforce by $2 an hour, as they meet increased customer needs. The pay raise will be effective at least through May 2. 
• Offered paid leave to workers who are pregnant, 65 years old or older, or who have underlying health risks, for up to 30 days. 
• Waived its absenteeism policy to support team members who may be unable to work because of school or daycare closures, or who stay home due to flu-like symptoms.
• Provided workers – including those at stores, distribution centers, and HQ locations – access to 25 days of free back-up care per dependent, including in-home care for children, adults, or elderly family members who live with Target employees.  
• Broadened the Team Member Giving Fund to support workers and their families if faced with unavoidable financial hardship in the wake of the pandemic.

Target’s initiatives show a clear effort to put stakeholder capitalism to practice, even in the face of crisis. To be sure, there is more to do – such as reducing barriers and strict requirements to taking paid sick leave – but JUST Capital applauds the company’s swift public response to workers’ needs.   

Principle Two: Adopt Practices to Minimize Job Loss

In immediate responses to this new reality, many companies have proven to be nimble and innovative. Companies should also adopt a similar mindset as they prepare for a potential recession, exploring new work structures and practices in order to avoid layoffs and additional hardships for workers, including: participating in Short-Time Compensation programs, reducing operating costs, employee-sharing with other companies, and developing just practices in the event of layoffs.

Example of Action: Hilton

Like many hotels across the country, Hilton has seen a significant decline in bookings and in some cases temporary closures, reducing staff needs and placing many workers at risk of losing their jobs. Hilton is taking a number of steps to avoid job losses – notably, providing additional support to workers who are seeking other temporary employment opportunities. So far Hilton has:  

• Adopted flexible hours, shorter work weeks, and job rotations at some of its properties. 
• Partnered with companies in other industries, such as Albertsons, Amazon, CVS, and Walgreens, among others, to connect workers from temporarily suspended hotels with short-term job opportunities.

Principle Three: Put Workers First, and Engage Government to Do So

Corporate America is well positioned to help implement Congressional efforts already underway and advocate for additional government interventions. While each company brings a unique voice and set of resources, all corporate leaders should consider: calling on Congress to pass paid sick leave for all workers, vowing to direct government assistance to workers, and eliminating future buybacks in the case of the company accepting government assistance. 

Example of Action: JPMorgan, Bank of America, Citigroup, and other major banks

The Financial Services Forum, which includes some of the biggest banks in the United States like JP Morgan Chase and Bank of America, announced that its members would stop stock buybacks through the second quarter of the year as a result of the coronavirus pandemic. In doing so, they aim to support the Federal Reserve’s efforts to moderate the impact of COVID-19 on the economy and global markets by maintaining strong capital levels and liquidity to support customers, employees, and shareholders.

Principle Four: Support Communities, Local Suppliers, and Customers

Companies should assess how strategic choices could better support their suppliers, the government, and community members by continuing to pay suppliers whenever possible, establishing or contributing to local community emergency funds, considering cost reduction measures to accommodate customers, and shifting production where appropriate to create items needed to stem the crisis.

Example of Action: PepsiCo

In response to the global health crisis, PepsiCo is taking global actions to support communities in need. So far PepsiCo has:

• Announced that it is mobilizing its resources to invest up to $11 million to provide food, water, and other critical support to communities affected by COVID-19 around the world. 
• Partnered with the USDA and the Baylor Collaborative on Hunger and Poverty to deliver a million food boxes to students in rural America, including a $1 million commitment.
• Provided $100,000 to Feeding Westchester to help distribute shelf-stable meals and fresh produce to local residents across Westchester County, New York. 
• Announced it will be donating $200,000 to each Red Cross in Italy, Spain, and France, and $100,000 to the Red Cross in Lebanon.
• Made a $1.5 million investment with the Global FoodBanking Network to provide water and nutrition solutions to 12 countries affected by COVID-19 in Latin America. 

Additionally, PepsiCo is working to maintain the supply and production of foods and beverages by hiring 9,000 full-time employees with benefits to deal with the high demand. These rapid response measures help customers and local communities experiencing hardships. 

Principle Five: C-Suite Leads by Example

CEOs and C-suite executives who are committed to practicing stakeholder capitalism should lead by example, by first considering salary adjustments and forgoing bonuses for themselves, as well as practicing corporate leadership by halting stock buybacks and dividend increases during this crisis. To date, we’ve seen a handful of companies, including GE, Delta, and Marriott announce C-suite pay cuts. Notably these announcements have been in conjunction with or following layoffs and furloughs. Other companies, including Intel, have made public commitments to suspend all stock buybacks in an effort to strengthen their finances, cash flows, and protect low- and middle-wage jobs.

In these unprecedented and uncertain times, JUST Capital’s five key principles can be a guide to implement practices that provide meaningful relief and support to workers, customers, and  communities. In the coming weeks, JUST Capital will continue to track and assess companies announcements, elevating best practices and encouraging companies to implement them.