British businesses are better prepared than many of their global counterparts when it comes to planning for key business risks, according to a new report.
Grant Thornton’s survey of 7,200 businesses across 32 countries asked companies whether they had formal documentation in place for dealing with a range of potential problems such as loss of suppliers/customers, loss of key personnel, disaster recovery and security of electronic information.
According to their findings, 77% of businesses had documentation in place to deal with disaster recovery a major IT failure, putting the UK in fourth and fifth place respectively. These results also compared favorably with the global and EU averages of 57% and 61%. In addition, 81% of business had a plan in place for dealing with a data security breach, 80% on the privacy of information and 73% for the loss or destruction of property.
Grant Thornton claimed these figures were "good news" for UK business as they were also well above average. Only 55% of EU businesses were prepared for a loss/destruction of property and 74% of global businesses were ready to cope with information security breaches. Alysoun Stewart, head of Grant Thornton’s strategic services group said: "Risk management should be an integral part of every firm’s strategic management, so it is encouraging to see so many UK businesses appearing to take the issue seriously.”Identifying fundamental risks and taking steps to prepare for them is essential for minimising the impact of a disaster, which is key to the continuity of privately held businesses."
However, while British firms were less prepared in other key risk areas, according to the report.
1.1 Lacking Formal Reputation Risk Fallout Procedures
Only 26% had a formal procedure in place to deal with a potential reputation or media crisis compared with a global average of 35%. Taiwan fared much better, topping the table with 61%, followed by Turkey at 57%. Alysoun Stewart said it was "staggering" that so many UK businesses were not ready to deal with potential reputation disasters.
1.2. Lack of Preparation for a Loss of a Key Supplier or Key Customer
Only 32% of UK business was prepared for a loss of key suppliers and 34% for a loss of key customers, compared with global and EU averages of 43% and 47%. "It is worrying that UK businesses appear to be overlooking these fundamental business risk areas, said Stewart.”While not as high profile or dramatic as some events, the sudden or unexpected loss of key personnel or a supplier can have a devastating impact on a business."
I wonder how many organizations in SA formally manage this process of building and fostering good working relationships in these areas.
Action Journal Entry
1. Prepare and have formal documented procedures in place to deal with a variety of risks and situations. Product Recalls and Dealing with evolving issues should also feature.
2. Revisit your stakeholder relationship management processes.
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