How the Bank of England responded to the pandemic
The Covid-19 pandemic has impacted the entire global economy, reshaping the workforce for the foreseeable future.
The pressure on CFOs during this time has been immense, and perhaps even more so for Afua Keyi.
As CFO of the Bank of England, her decisions not only affected a single organization, but the wider UK economy.
The Bank of England’s initial response
From the BoE’s annual report published in July 2021, their response to the pandemic on a national level consisted of a range of actions including:
- Cutting the interest rate to 0.1%
- Implementing further quantitative easing measures
- Helping businesses pay their staff and suppliers through the Covid Corporate Financing Facility (CCFF)
- Reducing capital requirements helping banks to expand lending
- Helping banks cut interest rates on their lending through the Term Funding Scheme for SMEs (TFSME)
- Increasing the notes in circulation by £10.3 billion
Internally, the bank prioritized employee wellbeing, placing it at the forefront of their approach.
Through careful risk assessments they were able to adapt many of their core functions, going from an estimated 5% of the workforce working from home pre-pandemic, to 95% operating out of their homes through the pandemic.
To enable their workforce to work from home, three key areas were identified.
Technology & property
The bank invested in the infrastructure to expand remote working capabilities and support future ways of working, through enabling remote access to Bloomberg and other key services. They also ensured all their premises were ‘Covid-secure.’
Surveys & wellbeing initiatives
HR conducted regular check-in surveys and ensured all colleagues had access to support for their physical, mental, social, and financial wellbeing.
Financial allowance for staff
The bank provided financial assistance to staff to purchase home working equipment and made — to Occupational Health review —
The role of the CFO in a crisis
The fundamentals of being a CFO include:
- Leadership
- Strategy
- Financial control
- Planning & analytics
- Business partnering
- Stakeholder management
- Diversity & inclusion
During a crisis, such as the pandemic, it is crucial to quickly establish what matters most. Crises bring market volatility, income volatility, and growth uncertainty.
At times like these, the CFO is responsible for transitioning the business from a tactical to strategic outlook. Tactical thinking is the immediate response, whilst the strategic mindset involves keeping sight of the need to gradually develop a multi-year plan.
As mentioned above, Afua reacted on all five pillars that helped to boost the economy during the pandemic.
Financial stability
Capital: stress testing and resilience built up in the financial sector since the global financial crisis.
Monetary policy
Liquidity: funding schemes set up, reduction in the bank rate to 0.1% and increased QE, boosting notes in circulation.
Markets & banking
Funding: Covid Corporate Financing Facility established.
Prudential regulation
Resilience: Dividend suspensions for banking sector, testing operational resilience of firms to withstand the pandemic.
Central services & support
Operations & technology: ensuring the bank and its people could continue to operate during the pandemic.
During the crisis, the priority for Afua was cost management. Looking beyond the pandemic, this will transition to cost transformation.
Maintaining a long-term vision has also been important for Afua, with a focus on culture change to make a more human, humble bank.
Covid-19 has caused a huge rethink for many organizations and their culture, with particular emphasis on recognizing workers as real human beings with real life problems.
To deliver the vision of a more human bank, Afua held feedback meetings and consultations internally, as well as with external focus groups.
The action plan was then published to launch the recommendations to the board and begin delivering the primary actions based on the recommendations.
Executing on the action plan became the job of each task force, with the success being monitored via a suite of metrics and governance reporting.
The final step towards embedding the cultural change is a continual effort to raise awareness amongst all colleagues, promoting a friendlier culture across the organization.
