For years those concerned about the consequences of an influenza pandemic from an exceptionally virulent flu virus, like A/H5N1 (“bird flu”) have despaired about motivating business, government and neighbors to take it seriously enough to make serious preparations. It’s understandable. There’s are a lot of potential catastrophes competing for our attention and while each can be made plausible if we can get someone to listen long enough, it’s rare we can do this. As I said, too much competition. Now that a real life influenza pandemic has arrived, the concern of some is that the public isn’t being told how bad this could become, possibly even 1918 level. My view is different. In terms of stimulating genuine pandemic preparedness, I think we are extremely lucky to have a pandemic that so far is nowhere near worst case scenario (and let’s be clear: it isn’t anywhere near worst case). The pandemic is no longer theoretical. It is here and tangible. And it is having some tangible effects in unlikely places, like hedge funds. Hedge funds?
Although talk of the swine flu has largely been out of the media for the past few weeks, a rush of new cases of the H1N1 virus is expected to hit financial centers in the fall and winter ” and organizations, and in particular hedge funds, need to be well prepared for a pandemic.
Bob Guilbert, managing director of marketing and products at Eze Castle Integration (booth 1804), which provides outsourced IT technology and services for hedge funds, says his firm has been taking a proactive approach to the pandemic.
“We’ve drafted our own response plan which we’ve issued to all our employees. The plan takes a look at if they’re ill, how to get checked out; if they travel to countries with the virus, what procedures they should follow. And if the company is in a situation of a pandemic, it maps out procedures for working remotely, etc,” he says.
Hedge funds in particular must make sure they have a solid plan in place, he adds, since they must conduct business during trading hours. They need to assess how they are going to stay operational if the virus sidelines their employees.
“We told them to think of a disaster recovery plan to make sure they can stay active. We have given them procedures on how to gain remote access to their working environment,” he said.
To avoid the spread of the virus, recommendations include having employees who are sick stay home for at least 7 days. They should then obtain a doctor’s note that they are clear.
In the case of a pandemic, firms should hold meetings by conference call where possible, and ensure that all employees have remote access to their work environment.
The hedge fund industry in general is keeping a wary eye on the pandemic, Guilbert says. (Melanie Rodier, Wall Street and Technolgy)
The fact is it is a lot easier to envision the consequences of a quarter or a third of your employees being out sick than to contemplate and accept as a reason to plan that there will be a total collapse of critical infrastructure. And it is a lot more likely, too. Even in 1918, critical infrastructure didn’t collapse. Piped water still ran, gas and electricity still flowed, there was still food in the markets. My mother was a teenager in 1918. Neither she nor any member of her generation ever mentioned those years to me. I myself have lived through two pandemics (1957 and 1968), each of which killed a great number of people. During one I was a teenager and the other already a doctor. I was aware of both, but only peripherally. They were public health catastrophes compared to most outbreaks, but they made little impact on most people. Having an easily visualizable problem, like absenteeism, is much more motivating than any apocalyptic vision of societal breakdown.
If this pandemic virus is like the moderately severe one of the 1957 pandemic it will have more of an impact, of course. First, we are a more tightly interconnected world. Things happen faster and on a broader scale than in earlier times. Second, we find out about them faster and on a broader scale than before. Earlier pandemics were well underway before they were recognized. Now we can know about one as it’s starting but not know where it’s going. This uncertainty can generate (appropriate) anxiety which can cause its own problems. Third, the US health care system is much more brittle than in 1957 and cannot absorb the shock of even a moderate increase in demand. It will break down and people will fall through the cracks.
We need to take it very seriously but we should welcome the lack of high public anxiety. As WHO’s Director General noted, we are being given a grace period during which many important things can get done with a clear head. Hedge funds aren’t unusually prescient (as the current financial debacle shows too plainly). They are just an example of what I am guessing is going on in many venues.
This is a pandemic preparation teachable moment.