Crisis Management

Quarterly Priorities Survey: Q1 2020

When we launched the first edition of Financial Executive International’s (FEI) Quarterly Priorities Survey in early March, we could not have anticipated the degree to which the outbreak of COVID-19 would impact every facet of American business. The aftermath of the pandemic and resulting recession should permeate every industry, resulting in a massive rate of change across all industries and regions. Moving forward, financial leaders will refer to things as pre- or post-pandemic. 

In the second quarter of 2020, FEI members’ priorities are to:
Keep Employees Grounded 

Mandatory stay-at-home or shelter-in-place orders have led to the majority of financial leaders reporting that they are certainly going to alter their work-from-home or travel policies in response to COVID-19 in the near term and economic restrictions in the long term. 

Recruit and Retain Skilled Talent in the Crisis

Management teams have remained most concerned with the impending economic collapse and attracting and retaining qualified employees. 

Rely on Local Markets

Financial leaders reported greater confidence in their local or regional economies than the US economy as a whole.

About the Methodology 

The Financial Education & Research Foundation surveyed 228 executive members from FEI’s 11 largest chapters (Arizona, Boston, Chicago, Colorado, Dallas, Houston, New Jersey, New York, Northeastern Wisconsin, Silicon Valley, and Twin Cities) on questions pertaining to regional and national economic sentiment, net working capital, merger and acquisition appetite, human capital, and policies pertaining to remote work and travel. 

The survey was active for the period ranging from March 17 to April 10 (inclusive) and represents a timestamp of member sentiment during the onset of one of the most challenging public health crises in recent history. 

1: The Future of Work

The mass work-from-home pilot and associated travel restrictions have led the majority of survey respondents to completely reconsider their organizations’ short-term policies related to remote work and travel, as depicted in the graph below. The degree to which travel has been impacted is demonstrated in interviews, in which one financial leader confided that his organization was poised to utilize less than 1% of its travel budget for the first six months of 2020. 


However, subsequent qualitative interviews on the topic of remote work and travel policies revealed that any long-term adjustments to the aforementioned policies should be less reactionary in nature and more likely to occur in response to the impending economic downturn than the recent public health crisis. Travel is viewed as a way to further develop a business and its people. One financial leader reflected on the value of the person-to-person interaction in business development saying, “We feel like there’s a strong connection when you can be face-to-face with a customer that just isn’t the same from a [technology] tool standpoint. That being said, our customers may say, ‘Let’s just do a virtual from now on.’ But I don’t know that we envisioned in the long-term that we would just do everything from our basements going forward.” Another interviewee remarked, “It’s hard to attend a trade show using Teams.” 

As it pertains to internal corporate meetings, one financial leader indicated that traveling for internal meetings might be tougher to justify moving forward, and that having to meet remotely has enabled them to see productivity gains by utilizing teleconferencing tools. 

While the perceived value of travel remains strong, many interviewees felt that they would need to reconsider where travel fits into their overall business strategy, to which one interviewee responded, “It would be more selective [in reference to future travel]. In the past we used to go to every conference. So, I think that we have more economic reasons to put more effort and focus into a few, as opposed to getting to every conference. It’s not really virus related, it’s now economic driven, because we’re seeing a slow-down and can’t spend as much as we would if everything were fine.”

"It’s not really virus related, it’s now economic driven, because we’re seeing a slow-down and can’t spend as much as we would if everything were fine.”

Rise of the Teleworkers
COVID-19 has led many organizations to rapidly progress through one phase of their digital transformation by enabling remote work at massive scale. While it is uncertain to what degree employees will return to the office after social distancing requirements are eased, organizations do possess a significant opportunity to redefine work in a post-COVID-19 world. 

David Newman, partner at Morrison & Forester commented on redefining work in an interview with FEI Daily, saying, “Many companies are going to need to invest more or think more about enabling categories of their workforce that don’t traditionally work from home to have more remote work functionality. We’re seeing companies trying to catch up and make that investment in the midst of a pandemic, but going forward I think companies are going to 1) have a longer term strategy for remote work on a scale that goes well beyond what people did before coronavirus; and 2) I think you will see certain classes of employees who historically were not permitted to telework be permitted, or even encouraged, to continue to telework once we are past this. Companies will learn the productivity and cost impacts of these changes, and it is a big opportunity for them to enact certain changes going forward that could be very beneficial to their workforce and for their own efficiency.”

2: Talent, Hiring, and the Financial Leader Reimagined

Aside from economic uncertainty, financial leaders reported that their management teams were most concerned with attracting and retaining top talent, as the balance of power in the job market has long favored professionals. 

For the general population, the changing economic climate has disrupted the job market equilibrium ― shifting power to organizations.   


The changed dynamics are demonstrated by the prominence of layoffs and furloughs in the news cycle throughout the month of April. A full 46% of survey respondents indicated that they were seeking to decrease their head count, compared to just 16% looking to increase their head count. Still, any companies seeking highly skilled finance professionals are likely to be disappointed. That is, the disrupted economic conditions mean that companies have a greater need for an already scarce population. Job seekers have long complained about companies dragging their heels in the hiring process. Any hiring during this and any coming periods of social distancing are sure to have increased levels of friction, which will manifest in the form of longer time required to coordinate hiring needs between the finance and human capital functions and potential delays due to employee illness ― among other factors. Thus, management teams that do not work to remove existing and new friction from the hiring process will find that they are likely to miss out on key talent.

Despite being among the easiest finance skills to staff, regulatory specialists are likely to become an increasingly important skillset for finance teams as they help organizations navigate changing regulations, growing business needs, and the steadily deteriorating economic climate. 

John White, partner and Chair of Cravath, Swaine, and Moore LLP’s Corporate Governance and Board Advisory practice and FEI Board member, articulated that the regulatory burden for private and public companies has become increasingly opaque in response to the outbreak of COVID-19 and recent legislation aimed at providing relief for affected companies. 

Complying with the more stringent regulations in Paycheck Protection Program round 2 is one of the most pressing regulatory tasks smaller companies are currently facing, White noted. 

Public companies are also facing an increased regulatory burden as they too seek direly needed capital from debt markets. “When accessing the debt market, you relied on your 10-K and 10-Q filings. For many companies, however, their most recent filings don’t describe the impact of the coronavirus, so they are filing massive 8-Ks in order to get the information out to access debt financing,” White said.

The likelihood of stage-4 COVID-19 relief legislation coming in the second quarter is high; this will only increase the regulatory time cost as companies determine which parts of the legislation apply. 

Essentially, this crisis highlights the increasingly expanding requirements for the modern financial leader; this expanding role is explained in two narratives shared from financial leaders: 

  1. One financial leader explained that their state received the stay-at-home order at three o’clock in the afternoon. Based on this order, all non-essential businesses were to be shut down by noon the following day. While analyzing what the order would mean for their organization, they realized that their organization potentially fit within an industry that was exempt from the order. They had to inform their people by that evening whether they would be coming into work the next day, so the financial leader quickly met with legal counsel in order to prepare and file the paperwork with the governor’s office in order to continue operating.

  2. Financial leaders from small businesses referred to the funding from the Payroll Protection Program (PPP) like biblical manna. After securing the vital PPP funding, one financial leader noted: “Getting this done was the only thing that mattered this week. I could have accomplished everything else on my to-do list but not getting this done would have been a fire-able offense.”

    After securing the vital PPP funding, one financial leader noted: “Getting this done was the only thing that mattered this week. I could have accomplished everything else on my to-do list but not getting this done would have been a fire-able offense.”

3: Economic Confidence is Local

That survey respondents display more confidence in their respective regional economies over the national economy is unsurprising. That is, they have the direct exposure and experience required to evaluate their local economy.

As displayed in the graphic above, only survey respondents from Chicago and Houston rated the prospects for their regional economy lower than that of the national economy. The degree to which relative confidence levels differed for the Houston respondents (-.76) is unsurprising, given the extreme distress displayed in the energy sector this quarter. (Houston FEI members also indicated the lowest confidence levels for their industry’s outlook, with a score of 5.33 out of 10). Overall, financial leaders from FEI’s Silicon Valley (6.83), Dallas (6.65), and Colorado (6.33) chapters displayed the most optimism for their regional economies. Houston, New York, and New Jersey chapters displayed the most sanguine views for the national economy.   


The heatmap above displays the confidence differentials for the chapters as it relates to the perceived differences between the regional/local economy and the US economy. For presentation purposes, Dallas and Houston chapters have been combined. New Jersey and New York members gave similar ratings to the regional/local economy, as expected due to the close proximity between the two chapters among other key similarities. On the other hand, members from the Dallas and Houston chapters provided dramatically differing scores; this is largely explainable by industry exposure. (i.e., Houston’s exposure to the energy sector is severely depressing sentiment around prospects for their regional economy as discussed above).

4. Looking Forward: Keep an Eye on Capital 

Over the first quarter, there is little pattern to working capital changes. Overall, 32% of survey respondents indicated that their working capital increased over the last quarter, 33% indicated that their organization’s working capital decreased, and 35% of respondents indicated that their working capital stayed the same.

Given the expected duration and severity of the downturn, we can expect working capital balances to decrease and companies to begin taking significant measures to preserve capital during the downturn. The impacts of this could be manifest in postponing or cancelling planned investments and trimming corporate payrolls ― among other cash-saving measures. 


The disruption caused by the COVID-19 crisis is unprecedented in both scope and depth, and senior-level financial executives have no real historical playbook from which to pull.

It should be no surprise that their first instincts are to first make sure all employees are safe by restricting travel and arranging work from home policies. It follows that their next priority is to retain their most talented finance professionals to help navigate and uncertain future.

Next quarter’s results will be key as the reality of a post-pandemic world settles in.