VIEW: On the risk response to COVID-19

We cannot avoid talking about the pandemic currently affecting the global business environment. It is, as Prime Minister Boris Johnson said in one of his many recent briefings,“the worst global health crisis in a generation”.

The director-general of the World Health Organisation, Dr Tedros Adhanom Ghebreyesus recently called for an enterprise-wide approach to battling the pandemic – one which places enterprise risk management at the centre of the crisis. We will soon see how our education, training and professional development has equipped us, and our organisations, to tackle this major risk.

The true impact on businesses will not be able to be gauged for some time, although we can see many businesses – from major airlines to local small-to-medium sized enterprises – already voicing their concerns about sustainability going forward and requesting assistance and guidance from the government.

Public health measures in the UK are currently focusing on delay; on slowing down the spread of the virus and reducing the numbers affected. Th e aim is to lower the peak impact and push it away from the winter season, initially by detecting and isolating early cases.

More severe measures may be put into place, for example reducing public gatherings, closing schools and restricting public transport, should it be deemed by the government to be necessary and cost-effective, although such measures would incur significant economic and other costs. As risk professionals, we are skilled at framing and understanding these difficult policy choices.

Preparedness is key, effective risk management and business continuity plans now kicking into place will play a pivotal role. Some less risk mature organisations will be in uncharted territory which will – inevitably – lead to some businesses folding.

A core principle of risk management is to learn from experience and improve; there will be lessons from the experiences of dealing with the challenges of COVID-19 which will result in improved resilience and better risk management in the future.

Global supply chains are being affected. On this topic, some readers will be interested to know that the IRM recently launched its new Supply Chain Risk Management Certificate in conjunction with the Supply Chain Risk Management Consortium). Founder of the Consortium and risk expert, Greg Schlegel says: “Most businesses do not embrace or embark on a strategic risk journey UNTIL they experience a risk event. If they do it’s all hands on deck 24/7, in an attempt to survive the event. If they do survive the event a lot of companies will go back to business as usual. Many companies do not survive a moderate-severe global risk event like the COVID-19 virus.”

In combating this, one of the challenges for risk managers will be to ensure there is a balanced, proportionate and common sense approach.

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