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Sunshine and stormy days – why risk and disaster management planning is vital for your business
02 June 2020  | Damian Viviers | Views: 641
 
As we know, life seldom goes according to plan and inevitably there will be both prosperous and difficult times. Sometimes however there are unforeseen circumstances, such as the COVID-19 pandemic, the nationwide lockdown and the resultant adverse economic impact, that have made for some very bad days and some even worse days to come. This has showcased the essential importance of planning for events beyond our control.

While the COVID-19 pandemic is generally being blamed for everything that is currently causing hardship, this appears not to be the whole truth. While the pandemic has certainly wrought havoc across financial markets and caused chaos not only to our daily lives, businesses operations and ability to generate and earn an income, it appears to have been more of a trigger or catalyst for the current global recession rather than its sole cause.

In any event, two things appear clear from the current circumstances -
  • the nature and scope of unforeseen disasters such as the COVID-19 pandemic can have devastating effects on a business; and 
  • difficult times, in whatever form, inevitably arise.
It is therefore clear that every business should conduct effective Risk and Disaster Management Planning in order to ensure that it has a solid foundation to combat, mitigate and manage hardships.

Within every business, no matter how small or large it is, there should be procedures in place to identify, evaluate, monitor and control risks, within the internal as well as the external environment of the company. Internal risks include, for example, a failure to ensure that a company’s internal structures comply with relevant laws, exposing the business to possible sanctions. An example of external risks would be possible changes in the economy or legal requirements that might affect the industry in which the company operates, or in fact disasters such as the current COVID-19 pandemic and nationwide restriction on economic activity.

Although an effective Risk and Disaster Management Planning model is generally complex and tailored to a specific business, this is generally comprised of four basic integrated elements:
  • Financial planning.
  • Good corporate governance, legal management and compliance.
  • Effective communication structures.
  • Risk identification, management and security.
The current circumstances clearly indicate the necessity for effective Risk and Disaster Management Planning. These strategic considerations are essential in not only holding a business together during difficult times, but ensuring that it has the necessary strategies, reserves and resources to weather the storm. In the current economic climate all businesses face challenges, particularly in relation to the uncertainty that the future holds. Beyond the current COVID-19 pandemic businesses will also have to continue planning for the future, not only to ensure that they are not exposed to unnecessary risks, but also to ensure that there are effective strategies in place to mitigate and deal with the risks that may arise. 

The current circumstances appear to indicate a long and difficult road ahead and many businesses should consider amending their day-to-day survival approach to one of effective Risk and Disaster Management Planning, not only to survive over the short term, but to rehabilitate and plan for the future.