Global Boardroom Highlights Coordinated Economic and Health Responses

THE GLOBAL BOARDROOM
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THE GLOBAL
BOARDROOM
HIGHLIGHTS: DAY 2
This week the FT launched The Global Boardroom, a new live-
streamed three-day event gathering the most influential voices from
policy, business, tech and finance to offer a comprehensive picture of
the global response to the Covid-19 crisis.
Through FT-led discussions with leaders from around the world, we
are looking at the impact of the pandemic so far, what is required
for recovery and the long-term implications of the developing crisis.
From the consequences of global lockdowns and the impact on
supply chains to the future of travel and cross-border dealmaking,
The Global Boardroom assesses the next steps in tackling the most
critical issue of our time.
Below is our selection of highlights from day two. We hope you
enjoyed the event and we look forward to you joining us for
tomorrow’s discussions.

In partnership with
8:30 – 8:55
The Global Economy: Tracing the course of the
economic shock
Ángel Gurría
Secretary General,
OECD
Moderator: Chris Giles
Economics Editor,
Financial Times
It is not clear when real recovery will happen, but it is important
to control the virus as soon as possible, as it is interlinked with
economic recovery.
AG: We should throw the rule book out and deal with the human and
health consequences. The quicker we do this, the easier and less
expensive this will be.
AG: I am not confident of the idea that we will have a v-shaped recovery.
I think it will be more like a “U” and the idea is to shorten the lower part
of the “U” as much as possible.
While there are unprecedented measures from governments
and central banks to inject liquidity, there will be inevitable
consequences.
AG: [The Fed and central banks] can inject liquidity and what they’re
doing is financing debt that needs to be repaid.
Countries will need better cooperation and coordination, especially
in fighting the pandemic.
AG: Greater cooperation and collaboration can enhance the actions or
means of any one country beyond its own outcomes.

In partnership with
9:10 – 9:50
Can China maintain its economic dominance post-crisis?
Weijian Shan
Chairman and CEO,
PAG
Min Zhu
Chairman, National Institute
of Financial Research,
Tsinghua University
Moderator: Henny Sender
Chief International Finance
Correspondent,
Financial Times
China will emerge from the crisis quicker than the rest of the world,
but the balance of power will not change massively.
WS: China may come out of the crisis two to three months earlier than
the rest of the world, but China will not go back to normal until the rest
of the world goes back to normal, because it also relies on the integrated
economy for exports.
There will be a change in China’s economic structure. Fiscal and
monetary policies will help state-owned enterprises and private-
owned enterprises bring together individual strengths and work
together.
WS: Financially, stated-owned companies are much stronger than
private companies. Through this crisis, private-owned companies are
much weaker and the demand side of consumption remains quite weak.
WS: Over the long run, the private sector will be the main driver of
economic growth. China’s growth will depend much more on improving
efficiencies in allocating resources and productivity.
MZ: The line between the two sectors will become blurred, because
China is going to carry out the more aggressive reform of a mixed-
ownership structure.

In partnership with
As global trade shrinks, China will move even more to domestic
consumption in the recovery process.
WS: China has been shifting its growth model in the past ten years away
from investments to domestic consumption. Last year was the first time
that the size of China’s retail goods market exceeded that of the US.
Protectionism from China and self-reliance are on a rise
globally. While this presents benefits, there may also be missed
opportunities.
WS: If a country restricts foreign direct investment, it doesn’t do itself
any good. Protectionism is on the rise in different countries, especially
with Chinese investment.
WS: The American market has become more restricted and the Chinese
market has become more open, ironically.

In partnership with
10:30 – 11:20
Stocks, bonds and the looming recession – is it time to
sell or buy?
Peter Pereira Gray
Managing Partner, CEO
Investment Division,
The Wellcome Trust
Kerstin Hessius
CEO, AP3 – Third Swedish
National Pension Fund
Niall O’Sullivan
CIO, EMEA & Asia,
Investment Solutions,
Mercer
Eoin Murray
CIO International,
Federated Hermes
Moderator: Katie Martin
Markets Editor,
Financial Times
Although there is risk and uncertainty, there is still optimism in
markets and how investors and consumers will react.
KH: We have no experience in a disaster that hits the whole world and
still we don’t know how long this will last. But neither can people stay in
nor will investors stay out for as long as this virus exists.
The government has been injecting support into markets and
companies and certain sectors, such as tech and health, have
become main drivers of recovery. This presents possible investment
opportunities, but it will also depend on the market and time frame
to determine whether we will return to previous highs.
PPG: For long term investors, think carefully about your portfolio and
what you want to be exposed to.
NOS: The question is what else should we have in our portfolios now?

In partnership with
It used to be government bonds, but it is going to be harder to see how
they are going to generate returns.
There are possibilities of a resurgence of inflation or continual
deflation as a byproduct of central bank support.
NOS: Inflation will be a triumph in the short-term. But medium-term, how
[people] react to it, what they do when they realise money is actually
quite plentiful, that’s going to be a key question.
EM: [Inflation] is a possibility, and continuing deflation as well. One
possibility is the rest of the world joins Japan in Japanification, where
we have low growth and no inflation for many years to come. Rates
have to stay low and we’re in this cycle that self-perpetuates over
decades or more.
12:00 – 12:50
Exit Scenarios: Coordinating the fight against COVID-19
Paul Franks
Professor of Genetic
Epidemiology and Deputy
Director, Lund University
Diabetes Center
Peter Piot
Director,
London School of Hygiene
& Tropical Medicine
Soumya Swaminathan
Chief Scientist,
World Health Organization
Moderator: Barney Jopson
Executive News Editor,
Financial Times
Returning to the new normal will require long-term efforts and
considerations in many aspects, including socially, economically and
physically.

In partnership with
SS: Countries and societies need to be prepared that this could be a
cyclical process. We cannot predict how this epidemic will behave when
people start mixing again.
In our poll, we asked: When will the world have Covid-19 contained and
controlled? 57 per cent of attendees voted for “within 2 years”.
Vaccines will be the way out, but they need to be widely accessible
and affordable globally.
SS: A vaccine is the best way to achieve herd immunity across large
segments of a population.
Cooperation between the public and private sectors, and between
countries will be key. Good communication between authorities and
the public will also help facilitate the efficiency of measures.
PF: If we can start to utilise the resources that are available in many of
our societies and bring those together, align them, then we can do a
much better job at controlling and containing the pandemic.
PF: There is also a high level of public suspicion in many countries
around both technologies and vaccines, so public health authorities and
governments will need to work hard to gain public trust.

In partnership with
13:00 – 13:50
Moral Money – Responsible Business in the Age of
COVID-19
Alison Kay
Global Accounts Committee
Chair, EY
Chris Pinney
President and CEO,
High Meadows Institute
Paul Polman
Former CEO,
Unilever
Tensie Whelan
Clinical Professor for
Business and Society and
Director, NYU Stern School
of Business and Center for
Sustainable Business
Moderator: Gillian Tett
Chair, Editorial Board, and
Editor-at-large, US,
Financial Times
The ESGs will become strengthened and important to the
global recovery.
AK: Profit will come if you focus on the planet.
CP: Covid creates an opportunity to address things in a radical way – we
have gone through a period of seductive incrementalisation.
TW: Prioritising ESG principles is just good management. You want
to build back better with good management practices. Investing in
sustainability increases innovation, talent retention and decreases risk.
How employees are treated today will be significant to companies’
future fortunes.
AK: Businesses should be doing what they can to support their
commitments to graduates.
PP: A lot of companies understood the need to have good relationships
with employees; these employees tend to do better during the crisis.

In partnership with
We’re going in the right direction.
TW: Companies have been treating labour costs as an external factor,
looking after their shareholders first. Low wage workers have doubled in
the past 10 years. We need more leadership on the S without losing the
E or the G.
TW: Companies don’t advocate for a higher minimum wage, they are
resisting it and not standing up for the workers.
PP: The money spent is tax money. It should be spent to create better
jobs out of this. Green jobs are more secure, as they are investing in the
future.
There are reasons to be positive, even in spite of cynical criticisms
on what has been done so far.
AK: The companies that are out performing in the market are the
companies with ESG in it … Businesses are now societal not just
economic.
TW: Companies do overstate but they are soon caught out.
PP: Increasingly we are able to measure the intangible. Some
companies are moving away from GDP – as a way to measure the world
it’s deeply flawed.
TW: While factories are not functioning, it is the perfect time to put in
energy retrofitting to improve the income potential, whilst also making
them cleaner.

In partnership with
14:00 – 14:25
How can previous crises help us cope with this one?
Sheila Bair
Former Chair, US Federal
Deposit Insurance
Corporation (FDIC)
Moderator: Gillian Tett
Chair, Editorial Board, and
Editor-at-large, US,
Financial Times
US banks are repeating some of the mistakes of 2009 by
paying dividends.
Banks have more liquidity because of the past crisis, but no-one knows
how bad this is going to get. The framework created after the last crisis
stated that if certain measures had to be taken they should stop paying
dividends.
Bank executives are expecting a wave of bankruptcies. As it becomes
clear that we could be facing severe losses, the US banks will be forced
to halt dividends.
They stopped paying dividends in the EU and UK, it didn’t spook the
market.
Banks have a special obligation to keep lending into the real economy.
If they can’t then we have a financial crisis. Keep them lending but make
sure they are preserving capital as well.
Money should be directed towards helping ordinary families, not
the secondary market and investors.
In the secondary market you’re helping the investors, not even the
employers so much.
Just because they have a lot of liquidity, doesn’t mean they have the
capital base to absorb the losses.

In partnership with
The lion’s share of the money is going into financial markets. The real
economy is disconnected from the financial markets – you help asset
owners, not workers.
Let’s see if we can get the money back down to the Main Street level –
bail out people, not capital.
If we backstop corporate America we will have the same kind of
sluggishness, we will lose the free market dynamism that is our major
benefit over China.
There is a provision, to get money directly into households, through
intermediaries – to put them on some automatic stabiliser.
14:30 – 15:20
The Future of Work after Coronavirus
Jason Fried
Co-Founder and CEO,
Basecamp
Elisabeth Reynolds
Executive Director,
MIT Task Force on the
Work of the Future
Mark Ridley
Group CEO,
Savills plc
Daniel Susskind
Fellow in Economics and
Co-author ‘The Future
of the Professions’,
Oxford University
Moderator: Isabel Berwick
Editor, Work & Careers,
Financial Times
There is an appetite for automation but it won’t result in job losses.
ER: It still remains true that the issue is the quality, not the quantity of
the jobs. Right now we wished we had more robots to help out and we
don’t. We need humans in all of these places, if we had the tech it could

In partnership with
augment these workers.
ER: What we want is smart data from big data. It’s not about substituting
for those workers, it’s augmenting those workers.
DS: The pandemic has created a strong incentive to automate. The
problem is that demand has been decimated.
Although remote working will become more common, it won’t end
the existence of the office.
JF: Bust the myth of the office. Give more people time to set their
schedule. Let people feel liberated.
ER: If you are in a lower income quartile, only 5 per cent can work
remotely. How do we make it safer for those who can’t? The benefits
system must be addressed.
MR: Quite a lot of secondary offices converted in the UK, a lot of change
of use there. Prime office markets not so much, they will need to use
them as a centre to show that their staff have a place and purpose.
Surveillance is unacceptable and oppressive. It cannot be allowed to
proliferate.
DS: A lot of the challenges we thought would face us in the future are in
front of us now because of the virus.
JF: Employee surveillance is disgusting and tragic. Just because you
have the power to watch them, doesn’t mean you should use it. It’s
allowing management to create an environment in which people don’t
want to work. Monitoring people is immature and speaks to a lack of
confidence.
JF: The expectation for eternal growth, working longer and longer, really
impacts mental health.

In partnership with
We all need to become more comfortable with upskilling ourselves
in the future.
ER: Resilience can be taught, how do we help people to gain those skills?
DS: Either you become someone to compete with machines, and go
outside their perameters or you build them. We are training people to do
routine activities machines are already good at doing.
DS: One of the consequences of the crisis is that there will be a lot less
resistance to working differently in future. Doctors believed it wasn’t
possible to see a patient remotely, access to justice couldn’t be
provided online.
15:30 – 15:55
The ‘Next Normal’ – What have we learned that will
determine the way businesses work in the future?
Kevin Sneader
Global Managing Partner,
McKinsey & Company
Moderator: Roula Khalaf
Editor,
Financial Times
Bringing business back as it was will not work.
KS: Working from home isn’t all it’s cracked up to be sometimes, working
from home can become sleeping at the office. Work and family lines
have got blurred, weekends get lost in the shuffle.
KS: This is the moment where leadership will truly be tested.
Saving lives is only the first part of this crisis, we must also
safeguard livelihoods.
KS: It felt in January that the turning point had been reached, investors
asserting themselves to say that climate risk is not an abstract issue.

In partnership with
KS: We’re going to have to rely a lot on parts of the world that haven’t
responded in ways we’ve liked.
16:00 – 16:25
How is COVID-19 changing the future of the car?
Håkan Samuelsson
President and CEO,
Volvo Car Group
Moderator: Peter Campbell
Global Motor Industry
Correspondent,
Financial Times
We will run factories according to demand, but safety must come
first as people return to factories.
The problem is not production, so much as demand from customers.
We always have volume-focused delivery; we produce as much as is
necessary for demand.
Safety and Volvo are intertwined; we have a responsibility to offer a
safe working environment, but people are glad to be back to work with
colleagues.
Governments should invest in future technologies.
If the government subsidised the old way of things that would be a
waste of money. It would be good to promote new technology; electric
cars are more expensive in the first year.
Electrification will go faster.
People will ask for more electric cars, it’s speeding up – everyone has
learned that e-commerce is working. Customers expect to get more on
the web, but we must combine that with physical offerings.

In partnership with
Automated robo taxis will come in time, but there are limitations: up to a
certain speed, in a certain area, not as fast as we thought a few years ago.
FT DIGITAL DIALOGUES: FUTURE OF THE CAR
In partnership with Dassault Systèmes
Bounce Forward: Recalibrating the Auto Industry for a
Post-Covid-19 World
19 May 2020 | 15:00 BST (GMT +1)
Join us for a live webinar session featuring top industry experts who
will discuss what shifts car manufacturers and their suppliers can
make to bounce forward, rather than back.
Register now at live.ft.com/futureofthecarwebinar
16:30 – 16:55
Building a global response to the pandemic
Tony Blair
Former Prime Minister of
Great Britain and Northern
Ireland, Executive Chairman,
Institute for Global Change
Moderator: George Parker
Political Editor,
Financial Times
Without a global response, countries are making it harder for
themselves to solve the crisis.
Senior leaders have not seen fit to cooperate as they should. There is
an agenda for the G20 around cooperation if needed, making sure food
supply chains stay intact, PPE supplies – the agenda writes itself.
It’s not about being selfish vs selfless, but about being stupid vs smart.

In partnership with
The challenge for government is immense, but there are ways the
British government can help itself manage the crisis.
This is the toughest challenge I’ve ever seen – I have a unique sympathy
for those in office.
There is a rational and practical reason for being less dependent on
sourcing things internationally. That isn’t nationalism. But if you only
do it on an ad hoc basis, that can look like nationalism and that can be
damaging for international trade.
In a crisis like this, you have to segment the main tasks, and put the
best people you’ve got – experts and politicians – that reorganise your
government to do it.
We should be exporting our institutions and practices to strengthen
the developing world in future.
The British government could do a lot by helping them to build
resilience and basic institution-building.

In partnership with
17:00 – 17:55
Can a prolonged depression be averted
Gita Gopinath
Economic Counsellor and
Director of Research
Department, International
Monetary Fund
Philip Lane
Member of the
Executive Board,
European Central Bank
Carmen Reinhart
Minos A. Zombanakis
Professor of the
International Financial System,
Harvard Kennedy School
Sven Smit
Chairman and Director,
McKinsey Global Institute
Moderator: Martin Wolf, CBE
Associate Editor
and Chief Economics
Commentator,
Financial Times
The baseline forecast is now for deep recession this year.
GG: The IMF had a dire forecast, but the economic outlook is already
worse than the fund predicted last month. The likely scenario is
a second wave of infections later in the year, and this will have
implications for the economy.
GG: There is possibility of recovery after a lockdown – China has had a
rebound
Households have been saving, and we don’t know when people will
start spending again.
PL: This affects sectors in different ways. In a world of global supply
chains it is important to look beyond input-output metrics. Even
economies that have been less hit will be hit by this. We know we will
have some recovery this year, but we don’t know how much.

In partnership with
PL: We have to make sure fiscal support is maintained as long as it is
needed.
Emerging markets are being hit the hardest, and they need support.
CR: A key feature of this crisis is it’s a regressive type of shock: it hits the
lowest income countries, and lowest income segments within countries.
GG: We need to ensure there is enough liquidity to help low-income
countries. The setback in poverty levels that this crisis is producing may
take a long time to unwind.
After the Great Depression in the 1930s there were a whole series
of catastrophic errors. We can avoid those mistakes if we cooperate
and act aggressively.
CR: It all depends how many large economies come to need assistance.
Out of the box solutions may be required. Trade protection and food
protection should be managed at a multilateral level.
SS: We need to tackle uncertainty around the virus. The government
has to do a lot: big public finance questions are going to dominate.
After this crisis my hope is in the speed of innovation; we will have a
completely different sense of speed – it might be the great learning of
a deep recession.

In partnership with
18:00 – 18:25
How do we move forward?
Al Gore
Former US Vice President;
Chairman, Generation
Investment Management
Moderator: Edward Luce
US National Editor,
Financial Times
The US is in the middle of a botched reopening.
It’s not a matter of choosing between health and the economy. If we
get the health measures wrong, one consequence is the prospect of
shutting down a second time. Quite a few states are moving forward
without listening to what scientists say.
This pandemic has exposed weaknesses in the make-up of
our society.
It has highlighted the unequal access to medical care, of access to
quality housing. Majority African American counties in the US have six
times the death rate.
Burning fossil fuels threatens human health.
Research shows that an increase in burning fossil fuels worsens the
health conditions that elevate the death rate from Covid-19 – it makes
infections more likely, and people are more likely to die.
Trump has failed horribly in his management of the pandemic.
He has failed to mobilise government resources, and is now trying to roll
the dice for a bit of extra growth.

In partnership with
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Global Boardroom Highlights Coordinated Economic and Health Responses

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