Courtney Adante, Jerome Hauer, Ph.D, Jonathan Wackrow, Martha Carter, Orson Porter, Stephen Cohen and Wolf Piccoli join Kevin Kajiwara to discuss the latest updates and developments regarding the effect of the coronavirus.
Kevin Kajiwara (KK):Good day everyone and welcome to our Teneo Insights call on coronavirus. Also welcome to day two of Teneo’s global work from home policy. We’re struggling just like the rest of you. This is our third call on coronavirus in the last month or so. The first two calls focused on familiarizing people with the disease, with the epidemiology of it and how governments and companies were preparing to meet the challenge. Now that we are fully in it, we have assembled a team of experts to answer your most pressing questions. And also, to discuss what we are seeing and what we are helping people work through on the business continuity and corporate policy front. We will also touch on the communications and investor relations front, politics and government policy response in various jurisdictions, and then we’re going to open it to questions.
I want to start on the politics and policy front and to help me do so is my Co-President of the Political Risk Advisory Business, Wolf Piccoli. He heads our research effort and really specializes in Europe. After a historic day in the market yesterday, markets are looking a little more mixed today, particularly in Europe, and U.S. equity futures have advanced, and this all followed significant Fed action over the weekend and other central bank action, particularly ECB action that has met with some mixed reviews.
Essentially, everyone is waiting for governments to step up and meet those central bank and monetary policy efforts with conservative fiscal action. What we have seen thus far of course has not been particularly coordinated either between countries or within. We can see how governors and mayors here in the U.S. have differentiated their responses.
Monday, we saw some cooler heads prevail at the White House, with a significant change of tone. The President has admitted that the situation is bad; he spoke openly of the risk of recession and about the effects of this lasting deep into summer. I think this tells you everything you need to know about how the U.S. government’s response is likely to start playing out.
Right now, we are in the middle of getting the recently passed House Bill through the Senate and to the President’s desk. Now that the FISA court issue has also been taken care of in the Senate, it looks like this will get through. Nobody wants to get held up in Washington much longer, so our team sees this essentially done within the next 48 hours or so, but that’s really the easy part. The hard part, and the real politics, are going to come in on the stimulus piece of all this. We’ve seen that Senator Schumer and the Senate Democrats are coming up with a $750 billion package, but there isn’t a whole lot of detail in that. It certainly did touch on airlines as an example. But then Secretary Mnuchin said he met with Senate Republicans who are going to unveil a plan on Thursday to the tune of about $850 billion.
The President teased all that out somewhat yesterday as well. The significant line coming out of him of course is that he was 100% with the airlines. No detail on that, but that is clearly going to be the number one part of the stimulus to watch for. The hard part then is going to be getting House Democrats on board. I think that the political storm is really getting teed up here. House Democrats are going to want assurances that stimulus aid is going to American families, to healthcare workers and professionals, and the corporate subsidies are seen as secondary.
If the President is right and this is going to continue well into deep summer, this raises the question of how many stimulus packages are going to be out there on the horizon. All of this of course in the context of an election year where every House member is also up for election. Senior citizens who are a big voting block are concerned. It’s going to be a very, very tricky political atmosphere here in the U.S.
We will also be looking at other items beyond just dollar stimulus, such as Senator Chuck Grassley (R) mentioning the rollback of China tariffs, potentially working with other countries in terms of a stimulus trade of sorts.. And clearly, we’re also seeing differentiated, unilateral action being taken by governors and mayors through our partners in Washington. Those are the issues we’re watching most carefully right now in the U.S. in terms of fiscal policy response.
But Wolf, the epicenter of the outbreak right now is clearly in Europe. Perhaps you can give us an update because we’ve seen in the European Union a whole lot of Europe but not a lot of union in terms of the responses of recent days. Where are we?
Wolf Piccoli (WP): Thank you Kevin. Well the Euro leaders are having their video calls today. They’re going to announce the most dramatic measure so far, unprecedented measure actually. They’re going to implement a 30-day travel ban for foreign visitors within the Shanghai area, which basically entails 31 countries. The suspension will be for 30 days to start with, but there is no term limit to that at this point. This is by far the boldest collective measure taken by European leaders to try to deal with the crisis.
Most of the countries are, at this point, in national lockdown. The only exception so far is the UK and to a certain extent the Netherlands. All of the others have had emergency measures put in place with significant restrictions in terms of travel, in terms of personal movement and so on. This is part of the immediate crisis management.
On the economic front, we have seen a variety of countries announcing measures like Italy, with a package of €25 billion. France and Spain are announcing theirs later today, and Germany announced their measures at the end of last week. The problem here, is these measures are not coordinated and are not of the scale to impress the market. We are missing what the media calls a “big bazooka.” The problem is that so far, the big bazooka is simply not appearing and many believe it won’t appear anytime soon, because the focus of the European leaders at this point is to tackle the immediate crisis. Bridging measures are being put in place to try and minimize the economic impact of these national lockdowns, but at this stage we aren’t in a position to look further down the horizon in terms of stimulating the economies there.
The country that we should keep an eye on here that could potentially trigger and convince European leaders to do something more is Italy. The Italian yield on the 10-year bond has doubled since last week. We are now at 2.4% this morning. If I take you back to the peak of the euro zone crisis, there was a sense that Italy was going to lose market access when the yield was at around 7%. And that 2.4% is a significant milestone that they passed just last week, but certainly not close to what we saw at the peak of the euro zone crisis. There isn’t that sense of urgency for the European leaders to move quickly on a coordinated and credible fiscal package..
My final point here is that if we look a bit beyond the immediate term, this crisis will have a significant impact on European politics and will significantly change the priorities of the government. I think potentially the biggest victim will be the green agenda, the green deal that was announced by the European Commission. I think it will be very difficult to push that forward in the middle of a recession and when the priorities are elsewhere.
We don’t necessarily see populist parties benefiting a lot from this crisis. What is interesting to see is that a lot of sovereign claim of these parties are losing appeal. We are also seeing a return to call the expert, whereas previously, the populists usually were fighting against the expert. Famously, Michael Gove in the UK argued that ‘the expert time was over.’ Well now the expert time is back in session, so certainly a change of landscape in Europe.
KK: Thanks Wolf. I want to move on now to China because, for all of the early mistakes that were made in China, the reality is that there are now more confirmed cases outside of China then there have been inside of China.
When we look at what’s happening in the United States and in Europe as just described by Wolf, these ad-hoc policy responses are shutting down critical elements of the economy and shutting down consumer spending. In the midst of all of that chaos, it’s actually much easier to shut down an economy than it is to coordinate the relaunch of one. We’re now seeing the relaunch of activity in China. The question is, ‘Are those numbers real?’ and I think for the most part our view is that they generally are.
Chinese economic activity is currently operating at about 70% of normal activity. The monthly economic indicators for January and February combined, that were released on Monday, were obviously very bad. March is going to show some improvement. Twenty-four of mainland China’s 31 province have downgraded their state of emergency level from Level I which was the highest state of emergency. Anecdotally, we’re seeing other signs of reopening. Apple has opened 38 of its 42 stores, Starbucks has indicated that 90% of its stores have reopened. Luxury brands like Hermes, 39 of 43 stores reopened. Now the government figures are probably exaggerated somewhat. Companies report on a yes, no kind of basis to local governments regarding their business resumption, so they may be reporting yes even if they’re still short-staffed. I think that it’s also true that labor and supply shortages do remain significant, and many workers that are returning to big cities from their home villages are still subject to 14-day quarantine.
Big data is less subject to government manipulation. Other indicators like coal consumption, electricity consumption, property transactions, traffic congestion, the light intensity that we see from satellite photos and the like suggest that economic activity continues to pick up the pace. Anecdotally, street life and retail life in places like Beijing and Shanghai are reviving. And you can see week-on-week that the traffic is noticeably increasing. Also, it would be difficult to conceal if hospitals were overloaded and overwhelmed. Social media and foreign journalists are on the lookout for that, and we’re not really seeing it at this point. Also, two of the emergency hospitals that were very quickly erected in Wuhan have now been taken down.
I think Western companies can take note on the lessons that are being learned by companies getting restarted. We’re seeing that health checks and protective equipment for employees are being required by local governments as a condition of reopening. Idle employees are being re-tasked to new activities. Restaurant, hotels and movie theaters are reallocating their employees to online delivery services and the like.
We’ve seen sales shift from off-line to online. We’ve seen non-medical manufacturers shifting to producing more medical supplies, liquor companies as an example starting to produce hand sanitizer. There are some creative opportunities that are emerging in China.
A lot of the questions that we are fielding and a lot of help that we are giving to clients at this time are really based on business continuity, security, protection for their staff and so on. To help us think through the latest on this front, I want to turn to two of my colleagues. Firstly, Courtney Adante who is the President of Teneo’s Security Risk Advisory business, that is chaired by former New York Police Commissioner, Bill Bratton. Courtney supports our clients with issues of resilience and business continuity via enterprise security strategy programs including emergency preparedness and response and crisis communications. She is joined by Jonathan Wackrow. He’s Teneo’s Global Head of Security. In addition to that, he advises clients on issues relating to crisis preparedness, planning, management and response. He is our regular law enforcement analyst on CNN, and he’s a former Secret Service Officer on the Presidential Protection Detail. So, Courtney and John let me hand it over to you and maybe you can fill us in on what you’re working on right now.
Courtney Adante (CA): Sure, thanks Kevin. I think , as we’ve all noted, , we’ve seen an unbelievable shift and unprecedented escalation in the corporate and government response measures to this outbreak, particularly over the last couple of weeks. At Teneo, our teams have been working with clients to prepare for successive stages of outbreaks from what I call a ‘day one’ or ‘no impact’ situation to ‘community infection.’ Then moving on to a ‘company infection’ to a ‘mass outbreak’ scenario, which requires partial or full shutdown of operations or a full-scale work-from-home operation scenario.
Just as recently as a week ago, our interactions with clients were largely focused on their concerns if someone in the community, where the company operates, was diagnosed positive with the virus, or whether they might have to close a single store or a location if an employee or customer tested positive.
Fast-forward to this morning, across industry sectors company operations have jumped from a day one response to what we would have planned for in a mass outbreak scenario. This is largely fueled by government recommendations and mandates to close local businesses, impose curfews, impose a shelter in place. These actions were largely driven by corporate decisions to protect the best interest of people and close all their offices.
Since Friday, offices in Midtown Manhattan where we work and surrounding our building were mostly empty, and yesterday Park Avenue was just an utter ghost town. Companies that have a largely hourly workforce requiring that people show up on site for work to run the business have had to make some hard decisions and they’re still going through that process.
For those that are able to continue to run their business with a largely remote workforce, we expect to see a whole new set of operational challenges and scenarios to plan for. We’ve been talking to clients about managing the transition from office work to working from home and all that entails, to dealing with things like employee burnout, feelings of isolation and helping them through that to keep productivity and morale levels up across the board.
For all of us, this is brand-new, fresh. There are no definitive signs yet to tell us when infection will peak and level-off, particularly here in the U.S. and in Europe, as we watch the numbers and the science and read the reports. We are asking people to have patience, focus on work, try to maintain some semblance of normalcy, find a new routine and lean on their friends, family and colleagues right now.
A major unknown for all of us is what happens when we get the all clear to re-emerge from our homes and apartments to go back to normal life whether that means working in a store, studio a manufacturing facility, restaurant or office complex. How will that happen and how do we recover? This is top of our minds, and we’ve discussed this at length internally. These questions are the foundation for what I think is the next set of technical strategic scenario planning and just general planning for businesses as soon as we complete this transition into our new remote operating model. I think a lot of companies, Teneo as an example, and probably a lot of businesses represented on this call, have made the initial transition. This might be week two or this might be day two, but now we have to see how this plays out over the longer term.
But no matter what, it’s our view that this environment really represents a significant leadership opportunity for companies to potentially refine employee communications, employee strategy and ultimately business operations. I think we will learn so much from the choices and decisions that we will make as employees and employers as we push through and figure all of this and out. The unknown makes it both exciting but in some ways a bit terrifying. My colleague John Wackrow is on the phone and I have been side-by-side with him in the trenches for the last few weeks and I’d love for you to share some of your thoughts Jon.
Jonathan Wackrow (JW): Absolutely, thank you Courtney. Just to reinforce a couple things that Courtney was saying, the dramatic shift and unprecedented escalation in both the federal and state response to the outbreak has caused many organizations to scramble to align their business operations into what has become really within the last 72 hours the new normal.
Due to the initial slow rise of COVID-19 cases within the United States over the past couple of months, many companies that we have been engaged with and have observed took a wait-and-see approach to crisis planning because dealing with a health crisis, and now a global pandemic, was outside of their typical crisis management plans. Those same companies are now quickly trying to enact policies to respond to government intervention that has caused significant impact to their operations.
Unfortunately, the threat of the virus itself and the uncertainty and anxiety that is coupled with it has led some corporate leaders to make short-sighted decisions. This is further exasperating the already confusing corporate response. We will continue to advise corporations to take pause and understand the long-term risk that this crisis has on their organization and develop phased-in strategies in alignment with their business operations. Today, most companies are impacted to some degree and unfortunately all the experts agree that things are going to get worse before they get better.
We are working with organizations to help address issues with their workforce and develop near term and long term action steps to address disparity between salaried workers and hourly workers. Additionally, we are advising companies on how to maintain an elevated focus on the employees who are continuing to work, whether it’s in the service industries or manufacturing positions, and most importantly, how to keep them safe if they are remaining operational. These actions are coupled with strategies focused on how to maintain productivity and efficiencies during a long-sustained work from home or reduced workforce environment.
While many organizations are just entering this response phase of the global crisis, at Teneo we are starting to work with clients on the recovery phase. The rapid closure and transfer of operations caused by this crisis seen by many organizations poses a unique recovery challenge in terms of communication and resuming increased operations inevitably. As Courtney stated, organizations face many uncertainties in a recovery period. And the road to a steady state of operations will require a significant corporate leadership to navigate organizations back to a regular order.
KK: I want to draw on everything that Courtney and John just talked about and the lightning speed with which an unprecedented situation has unfolded. This is going to challenge every organization in terms of how they conduct their communications both externally and internally, as well as with their institutional investor base.
To that end I wanted to bring in a colleague of mine, Steve Cohen. Steve is a Senior Managing Director with the Strategy & Communications Advisory business of Teneo. He focuses on comprehensive reputation, corporate communications positioning, and investor relations programs for many of our clients. Steve, this is an evolving challenge for companies. How are companies meeting it and how are you advising that they do so?
Steve Cohen (SC): Thanks Kevin and good morning everybody. As companies manage through this shift and figure out how to stay operational and how to keep their employees engaged, we have seen a huge shift in communication. Companies are communicating directly with their customers in a way they never have before sending emails to their databases explaining how their operating, how they’re treating employees at least in the short term. Similarly, companies we’re talking to are communicating aggressively with their employees in general. It’s our view that over communication is the order of the day especially with employees but also with customers. We’ll come to investors a little bit later in the conversation, but I think there’s a real interest in our brands and in our companies - in knowing how management’s thinking about this issue and what it means for them and their obligations.
A survey that our research group conducted last week indicated that clear communications and understanding the company’s plans are the most important issues for employees with more than 2/3 of respondents ranking it first; 70% of those who responded in our survey say that ultimately the responsibility of being prepared and taking care of communications and the employees rests with the CEO.
More than half of the employees that we spoke to believe their company is keeping pace with peer companies. But there remains a view almost universally that there’s more that companies and leadership should be doing to ensure that companies are prepared to manage through this uncertainty- which is clearly unprecedented.
Turning quickly to investors, we all know that equity markets, and fixed income markets for that matter, have been whipsawed, swinging wildly over the course of the last few weeks as investors attempt to flee to safety, but have a hard time finding a safe haven. While it’s clear that the actual performance impact on many companies will be substantial and even catastrophic, most companies we’re talking to believe it is too early to mention exactly what that impact will be. While some companies have withdrawn guidance, the majority that we’ve advised have refrained from doing so at this point as we look for clarity on duration and severity.
That said, this is a moving target, so remaining engaged with investors and analysts is important and doing that frequently and giving regular updates on operations and supply chains is crucial. We’re working with a lot of clients on doing some virtual investor meetings, virtual roadshows and starting at least a conversation with the investor base.
Earlier in the call Kevin, Courtney and John all mentioned the challenges of restarting an economy. As we move through this process and companies try to get their operations back online, we expect it will take a new level of engagement, encouragement and communication to bring customers back to outlets, to bring investors back into equities, and to bring employees back to work.
As disruption wanes, focus will shift to how companies are engaging with their communities and the world at large and deploying their resources, whether they be human capital, financial commitment or other capabilities to aid populations in managing through the pandemic crisis and the recovery. Some of these commitments are already beginning to take shape. One that stood out for its creativity is LVMH’s conversion of its perfume production and packaging to produce and distribute hand sanitizer around the world. We’ll no doubt see more of this, and I think all central stakeholders, investors, employees, customers and the like will expect this.
KK: Now we’re going to open it up to questions. Myself, Wolf, Courtney, John and Steve are all positioned to expand on anything we’ve discussed so far. I would like to also introduce my other colleagues who are joining us for this portion of the call. First is Martha Carter. She is a Vice Chairman of Teneo and the Head of our Governance Advisory. She focuses on shareholder engagement, activism, defense, executive compensation and other matters of governance and best practices, particularly for the boards. She was formally the Head of Global Research at ISS.
Orson Porter is also on the line. He’s a Senior Managing Director and the Head of Teneo’s Washington office and really heads up our government affairs practice. He is the former director of government and public affairs for Nike and before that served at the White House as a Special Assistant to President Clinton. Many of you who have joined our previous two calls will be familiar with Dr. Jerry Hauer. He’s a Senior Advisor and he’s a leading expert in emergency response and management and crisis planning. He was the Commissioner of Homeland Security and Emergency Services for New York and the Director of the Office of Counterterrorism and the Acting Assistant Secretary of Health and Human Services in the Office of Public Health Emergency Preparedness. So, they are all here to field your questions on this fast-moving issue.
Jerry maybe I can go to you. I know you don’t necessarily have an outright answer to this but where do you think we (United States) are right now in this virus outbreak, how have things changed in terms of the characteristics of the outbreak? What are your thoughts at this point?
Jerry Hauer (JH): Unfortunately, we’re behind the curve here in the United States. We are seeing a rapid increase in the number of cases and I think that increase will continue. The evolution of this virus from the outbreak could wind up being over several months going into May, June or July.
The whole goal at this point is to reduce the impact on the most vulnerable populations, which will reduce the impact on the healthcare setting. There are two structures to do that. One is mitigation, which focuses on slowing, but not necessarily stopping, the spread of the epidemic. The other strategy is suppression, which is geared at reversing the growth of the epidemic.
At this point in time we are now seeing governors and mayors being very aggressive at doing both mitigation and suppression. Just yesterday, Governor Cuomo asked for federal assistance because the projections in New York State will put huge pressures on the health care system. We’re already starting to see it will be overwhelmed both in the number of regular beds, but particularly in the number of intensive care beds. We can see significant overflow in the number of cases requiring intensive care.
Question – Caller 1: My question is that we’ve all seen the flattened curve images which for me have been very helpful in understanding how social distancing can help suppress progression through the community. What is the endgame for working from home? How do you all go back to work without then having a steep curve? Are their thoughts on a staged coming back to work and continuing of society? Thank you.
JH: There are several components to that. One is that approximately 60% of the people in the country will be expected to have been exposed to the virus. There is good evidence that once you’re exposed and have developed antibodies, the likelihood of you getting sick from the same strain of the virus after exposure is very low. In essence, a good part of the state population will continue to be immunized. As that occurs, there will be less in the way of cases.
The problem is, as the virus spreads throughout the population, it will impact a greater number of the most vulnerable. So, we’ll see that spike in the number of serious cases and the number of deaths. The goal was social distancing, shutting down universities, isolating people who are sick at home and quarantining household members who have been exposed, which will hopefully start to flatten this curve. But once we see things start to flatten there is the potential to start opening components of the population. That’s something that will have to be done on a case-by-case basis; it can’t be done countrywide. It’s going to have to be looked at city by city to see whether we’re seeing a reduction in the flattening to better understand these micro-epidemics around the country. The ability to try and reopen things will be determined when the micro-epidemics start to level out or start to decrease. This could take four, five months until we get there.
KK: Courtney and John, you both mentioned working with clients, in terms of a restart date, is there anything you want to add to what Jerry just said?
CA: I think this all plays into the let’s get ourselves transitioned into this remote work scenario. We have to start thinking about the different scenarios and planning that will take place in order for us to re-emerge from home and go back to the office. I think Jerry makes a really good point, as part of scenario planning, we will need to be thinking about this staging of being able to come fully back online again. While right now, I don’t have the answer, I think it is important to plan for any time frame whether its 2, 4 or 6 months out. In terms of staging, we are going to have to wait on an analysis of these micro-epidemics across the country.
As we get a little bit more intel from the science, that will help inform businesses to figure out what the various scenarios look like over time and whether we can go fully operational again. It’s important to determine if there is work that people can do from home, or if it’s production or manufacturing, do we have to halt operations completely or what does this look like?
JW: I would say we should watch very carefully how South Korea and China come out of this. As a country, we did not pay close enough attention to them going into this crisis. We need to watch very carefully how they come out because there will be lessons learned and cautionary tales and successes alike.
Question – Caller 2: I’m wondering if any of the experts would comment on whether the poorly coordinated response within Europe and then across the Atlantic will lead to a second wave of infections and that basically none of us can recover until the last person recovers?
JH: What we’re seeing is rapid growth throughout Europe, but we don’t know whether there will be a second wave. We know that Italy, Spain and France are still on the upslope. We’re hoping that as they continue to grow, we will see some of this immunization in the population start to spread. Whether or not there’s a second wave, we can’t tell at this point.
As Jon said, it will be very interesting to watch China and South Korea re-emerge or come out of the epidemic. We will be closely monitoring whether we start to see a spike in the number of cases again as businesses reopen and social distancing is reduced.
Question – Caller 3: I know no one on the call has a crystal ball, but as you all know, there’s a shelter in place in six counties in the San Francisco Bay Area. How do you all handicap a national quarantine at this point? It would be great to get your point of view on the probability of that happening in the near future.
JH: I think at some point here, we will see the President tell people to shelter in place. It is something that is difficult to enforce, but if people do social distancing, shelter in place, closing universities and closing schools, it will have an impact in reducing the spread of the epidemic. I do believe there will be some more dramatic pronouncements by the White House. Orson may be able to answer that as well.
OP : The only thing I would add is the governors and mayors who are making all of these announcements about closing the public facilities, restaurants etc. I would look to the governor and the local officials to take a leading voice in these discussions. DC may be secondary. The President’s announcement definitely will be important, but as you’ve seen over the course of the last 24 hours, a lot of the governors are partnering together. A lot of these communities are interconnected, and decisions will impact their states, as well as neighboring states, so look for governors to increasingly play a more important role.
JH: Let me also add that people don’t really become positive for the virus on testing until about a day before they become symptomatic.
KK: Let me ask a couple of other questions in the remaining time we’ve got left. Steve talked quite a bit about corporate communications and investor relations specifically. Martha, I want to ask you, shareholder meetings are always a big event to be planned for, and I think we, and you in particular, are getting a lot of questions on virtual meetings, companies concerned that their proxy advisors and the investors themselves don’t really like them, but what are you seeing and what are you advising on that front right now?
Martha Carter (MC): We’ve been getting questions on everything from PS&G to executive compensation during the market downturn to pre-IPO and deals, activism, how boards handle this and so on. But the topic of the day, as Kevin mentioned, is virtual meetings considering the time of the year that we’re in. We have seen some companies already go to virtual meetings. We’ve seen some companies announce them and certainly a lot of companies are thinking about it.
We’re early in proxy season now, so this all hasn’t played out yet, and we’re working on a client bulletin to send out with additional information because there’s a lot in this space, more than we have time to talk about today. But the capability to do it has been in place for a long time. The SEC just put out guidance last week.
The real line in the sand for a company is whether you’re pre-proxy filing or post-proxy filing. As Steve mentioned in his remarks, communication is the order of the day and that’s certainly going to be true here. The governance groups Counsel of Institutional Investors and the proxy advisors have indicated that going to virtual shareholder meetings is certainly reasonable, but they’ll be looking for a whole lot of things, including the ability for shareholders to have a two-way dialogue and to not be disenfranchised.
If you’re a company, you want to make sure you focus on the SEC’s recent guidance, which we will indicate in the bulletin we’ll be sending out this week, as well as your own governing documents, and also state law is important. Delaware allows virtual meetings but not all states are as friendly.
KK: The one inevitable follow-up question to that Martha, and it’s probably too early to say, but if these work well for both the companies and investors, presumably the cost is going to be a lot lower than putting on actual meetings. Do you think that this could be the new normal?
MC: I think, sure and it’s not too early to start taking a look at that. In fact, ISS has already indicated that while they don’t have a policy on virtual meetings, they will be taking a look at company responses to it and how these meetings play out this year to determine what their policy might be for next year. Appropriate communication to all market participants, and the ability to have that two-way dialogue so that shareholders can ask questions, means that there could be a softening on the stance going forward into 2021. It’s communication around this that will be very important.
KK: We’ve got a question from some colleagues of ours in Hong Kong regarding the upcoming U.S. election. Not so much your opinion on the outcome of what the election will be, but I think purely with regards to the logistics. What are the logistical risks to the election process and the conventions for that matter?
OP: I think, the number one risk is people being generally dis-interested and not exercising their right to vote. What you will see is a continued rollout of states postponing. I think Kentucky just announced during this call that they were doing the same. It wouldn’t surprise me that Wisconsin does this in the next two or three weeks, Pennsylvania and then ultimately Florida. What you will see is states exploring the success of mail-in ballots as you see in states like Oregon. That model will prevail.
On the debate, not having an audience was well-received and it may become a national model. With conventions, I think one thing that President Trump said yesterday that a lot of people didn’t talk about was if this does roll into August, then you’re looking at potentially the postponing of the Democratic Convention in Milwaukee in July, or completely moving it out and the Republican Convention being in August. There’s a high probability if no one is able to travel and corporate sponsors aren’t able to get there, that the conventions won’t make a whole lot of sense. Look for everything to go virtual, look for a lot of mail-in ballots, look for states, until we get through this, to make probably the right decision and postpone their elections or primaries.
KK: Great, thank you very much Orson. I want to thank everybody. I know that the situation is evolving very quickly. We’re all adjusting to a new reality, work reality, home reality and that your time is precious, so we appreciate you taking the time to join us today. If you have a new question or didn’t get to ask your question, please don’t hesitate to send us an email. Contact us either through your Teneo representative or send us an email at email@example.com .