How to ensure risk and business continuity management add value
Too many companies see risk management and business continuity management as compliance issues, something they need to do to keep both shareholders and regulators happy. A much better approach, says ContinuitySA Advisory Manager, Junita van der Colff, is to view risk and business continuity management positively, undertaking them in such a way as to add value to the organisation.
“Businesses face a growing number of new and unexpected risks. To enhance their sustainability and grow value, companies must be able to identify and prevent or mitigate risk, and to recover from a catastrophic event. In this context, enterprise risk management and business continuity management emerge as hugely valuable programmes, and should be treated as such,” Van der Colff told an international audience as part of ContinuitySA’s contribution to Business Continuity Awareness Week.
Van der Colff further explained that the uncertainty created by risk also creates opportunities for new ways to achieve the corporate objectives.
She advises businesses to consider their risk and resilience strategies in the light of the following three drivers:
Ensure the organisation is sustainable. Although environmental issues are important, they are only one facet of sustainability, Van der Colff warns. Other facets would include the society in which the organisation exists, and the economy: People, Planet and Profit, in a phrase. In these days of consumer activism and social media, an organisation’s stakeholder grouping is very wide—a significant risk and also an opportunity.
“Is the organisation investing to ensure that it will have the skills it needs in 10 years’ time? Is it prepared to deal with intermittent power or water supply? Does it have the financial muscle to withstand periods of low economic growth or instability?” says van der Colff.
Create enterprise growth and value. There are a number of considerations here, not all of them able to be quantified, but nonetheless contributors to value. The financial value of a company is positively impacted by its ability to avoid risk or recover from a catastrophe. The organisation’s reputation, similarly, has a tremendous value that can be devastated by an organisation’s poor handling of an event, or its failure to engage properly with stakeholders via social media. Proper risk and business continuity management can help to protect the organisation’s most valuable assets, its people, especially in terms of institutional memory and innovative leaders and thinkers. Risk and business continuity management can also help to ensure that an organisation keeps its technology, infrastructure and assets protected and up-to-date.
Protect the organisation. Cyber-attack is an increasingly important item on the board agenda as business continues to digitise; similarly, social media, climate change and regulatory change all constitute threats globally. Proper risk and business continuity management enhance an organisation’s ability to mitigate the risks they pose, or to recover from events if they do occur.
In summary, Van der Colff says that effective risk management and resilience add value by providing information for better decision-making, promoting proactive behaviour and minimising the impact if something goes wrong.
“Perhaps the main value that risk and business continuity management add is the way in which they build up stakeholder trust, giving the organisation its ‘social licence to operate’ and ensuring it will have a sympathetic audience in the event of something going wrong,” she concludes.