The end of 2019 indicated optimism and hope, which had not been seen for a long time, especially
regarding the resumption of the Brazilian economy after difficult years. However, the respondents’
concerns pointed out the need for tax, fiscal, and social security reforms.
However, at the turn of the decade, the first year began with frightening records of the rapid expansion of Covid-19 and the failure to materialize the reformation agenda in Brazil. Executives and leaders of organizations around the world faced other unprecedented and urgent issues such as: maintaining the company’s financial health (liquidity), the well-being and maintenance of employees’ jobs, unveiling public policies enacted on an emergency basis, monitor provisional measures and appropriate legislation for each category and sector of the economy. This was just the beginning of a long period of uncertainty and volatility throughout 2020.
Unemployment, the bankruptcy of companies, and the deterioration of the economic-financial situation signaled the dire consequences caused by the pandemic in the market. In this context, the Brazilian Federal Government took measures to tackle Covid-19. At the same time, state governments tried to balance policies of social isolation, public health, education and security with the continuance of essential activities to supply the population.
However, the federal government faced challenges, such as transferring resources to cope with the disease and reducing the recessive effects of the economic crisis that emerged day after day, all at the same time.
Furthermore, the transition period and the inauguration of the new President of the United States of America in late 2020 and early 2021 generated great tensions and expectations on the international stage. The unifying tone of the speech of the new Democratic president inaugurated a new phase in the American government through decrees and the resumption of the country’s position in
the global discussion about climate change, security, and the economy.
At the same time, Brazilian municipal elections had a strong appeal and influence in the decision-making of the government and the vaccine’s rollout expectations in the states. Throughout 2021, these acts must include, at the municipal level, support actions in the prevention and the continuation of the struggle against the pandemic.
This macro-political and economic context summary gives organizations an incentive to be more flexible and proactive in adjusting to the challenges imposed by the “new normal”.
Since 2019, Grant Thornton has been a supporter of the FDC Strategy Reference Center - CRE. Among its purposes is the dissemination of knowledge and partnership in relevant content that collaborate for the sustainable development of organizations and society.
Considering the set of policies and their consequences to the productive sector, leaders and entrepreneurs must make quick decisions to maintain operations and the survival of companies. Therefore, being aware of regulations, legislations, and judicial changes become an important measure.
Next, we present a list of recommendations that can be useful as a reference for resilient actions in
favor of changing behavior and adequacy in the coming years - post-pandemic.
- Investigate the impact and the possible continuity of some of the provisional measures, enacted by the government in 2020, aiming at making labor laws more flexible. New business models, account management, and cash generation can benefit from those provisional measures.
- Engage the company’s legal department to anticipate jurisdictional scenarios;
- Carry out frequent monitoring of changes in the legal, regulatory, and contractual realm, aiming at evaluating cost reduction alternatives;
- Search jurisprudence of similar situations of legal disputes for contractual disagreement, to be able to plan future lawsuits;
- Follow national monitoring and restrictions imposed in other countries, so that these measures do not affect directly your business’ productive sector;
- It is advisable to design various alternative regulatory implementation scenarios;
- Have a transparent and integrated action with the regulatory agencies and inspection bodies;
- Review and analyze insurance and health insurance contracts, looking for possible coverage gaps for the current pandemic situation;
- New strategic investment planning must be done considering all the changes in the areas that the company has been following;
- Verify the existence of actions that can be carried out jointly with the Government, even at this moment when the “new normal” is resumed;
- Evaluate, together with the inspection and control organizations, if there is a possibility of greater flexibility in some rules that may benefit the enterprise;
- Check the existence of measures that the company can take jointly and collaboratively with the government (example: hotels that serve as hospital beds for the treatment of Covid-19).