Competitive Advantage

• The companies that can prevent absenteeism during a pandemic will be well-positioned to take market share from those that can't— situation that may be hard to reverse once the panic subsides.
• They also may enjoy higher stock prices and cheaper credit because financial markets tend to reward firms with steady profits and cash flows.
• Even if a pandemic never occurs, suppliers with a reputation for being prepared may have a competitive edge. Customers care about reliability and will value a supplier with a plan for weathering an economic shock.

The good news is that employee absenteeism—and its financial toll on employers—may be controlled to

a large extent with adequate planning and stockpiling of antiviral medication, masks and gowns.

Being unprepared carries potential risks, even legal ones. The Sarbanes-Oxley Act requires managers and directors to manage identified risks as part of adequate corporate governance of public corporations. To the extent that identifying and assessing pandemic risk becomes a generally accepted practice within the corporate community, those who are unprepared may be found to be negligent, and therefore liable to stakeholders, in the event a pandemic occurs.

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