Interview, Fireside Chat
How Corporate CEOs are Navigating the Shutdown
- Clients are projected to progress through three distinct phases over the next eight weeks, beginning with a focus on liquidity, followed by an analysis of short- and long-term impacts, and concluding with preparation for Q1 earnings calls to position companies for future growth.
- Approximately 90% of clients are currently struggling, while 5–10% are observing increased demand; management teams are debating the appropriateness of capital allocation actions such as dividend reductions and share repurchases amidst these divergent trends.
- Corporate boards have assumed a more active role over the past two months compared to the previous year, engaging directly in crisis management strategies including dividend adjustments and government relations.
- Approximately 95% of client employees are working from home, though essential sectors like manufacturing and food plants have already begun returning staff to physical locations.
- The expected return to office operations will occur in phases characterized by social distancing and new safety protocols, potentially involving a "red team, blue team" approach for limited staffing in retail, travel, and restaurant sectors.
- The economy is anticipated to reopen gradually through a sequence of new rules applied step-by-step, with each client navigating the process uniquely based on their specific industry.
- Significant deal volume is not expected immediately, though pent-up demand for M&A and growth is emerging incrementally from clients.
- Q3 and Q4 are forecasted to be highly active periods for M&A dialogue, driven by industries emerging with different strategic landscapes where specific assets may now hold higher value.
- The firm is increasing video communication with employees, maintaining the belief that while video will marginally increase for efficiency, building trust as a trusted advisor will continue to require face-to-face interaction once the crisis subsides.