Second spike creates a crisis loop, Airmic's Graham warns

As the country faces a second spike in the coronavirus, crisis management teams have been urged to look after themselves so that they are fit to look after their firms. Speaking to press on the first day of Airmic's annual conference, deputy CEO and technical director of the risk association, Julia Graham, said the second spike comes at a time when businesses are still trying to recover from the first. The resultant crisis loop demands that risk professionals bolster their own resilience and reserves.

"You cannot manage a crisis for six months and not take a break," she warned.

Kicking off its three-day Fest, the association said the pandemic has amplified the challenge of a siloed approach to business continuity management and crisis management and has highlighted a disconnect between strategic risk and operational resilience and response.

To help address this, the association announced the launch of a new report examining the actions risk professionals have taken and suggesting a number of changes as businesses move towards the 'new normal'. Prepared in collaboration with the risk experts at Control Risks, New Challenges, New Lessons is aimed at Airmic members who have a responsibility for organisational resilience, their top management, organisational peers and external stakeholders.

The association, which registered a record 2,000 delegates at its online event this year, believes risk professionals will play an even more critical role going forward, and that the pandemic represents an opportunity for the profession to shine.

"[The crisis has] created the opportunity for a lot of risk professionals to put their hands up and say 'we can help'. It's also highlighted that some members need slightly different knowledge and skills," Graham explained.

The Airmic Fest is presented at an absolutely crucial time in this pandemic, and there is a wealth of timely analysis available for all businesses over the coming days about this most important issue, as well as many others of concern for risk professionals.

Principles for resilience (Source: New challenges, new lessons, Control Risks and Airmic, 2020)

Several core elements to resilience are emphasised by the report: leadership, data, people and operating models.

Effective leadership is regarded as the most important resilience principle that organisations prioritise. Some 70.7% of respondents said it was among their organisation’s top three priorities.

This requires striking the balance of involvement of senior leadership (ie. CEO) in continuous crisis management, while avoiding knee jerk, ill-informed leadership decision making.

The second element was data. Organisations were heavily reliant on data supplied by UK government sources for risk intelligence during the COVID-19 crisis. Some 84% of our respondents found it the most useful source of risk intelligence.

This was followed by third-party sources, used by 54.7% of respondents. Meanwhile, less than half of respondents relied on tailored advice and guidance such as from risk advisers (45.3%) and insurance advisers (22.7%).

The third element highlighted was people. There were high levels of confidence that risk professionals have had the right competencies to deal effectively with the pandemic, especially pertaining to risk awareness and scenario planning skills.

Among respondents, 85.4% believed risk professionals in their organisations have the right knowledge, skills and behaviours to do so. Where it was felt they required further development was in the awareness of the interconnectivity of different risks, and in engaging with business issues.

The structure of the current workforce in some organisations is not set up to meet future requirements. Of our respondents, 39.5% said their organisations were not considering remote working as a permanent option, even for roles that allow for it, or were still tentative about remote working options.

Operating models are also crucial to resilience. There was a very strong perception that the crisis management of organisations were effective during COVID-19, according to 96.6% of respondents.

A significant proportion of organisations (41.7%) plan to make changes to their supply chains. An interruption to a supply chain can cause an array of problems -- from loss of revenue and reputational damage, to breach of contract, loss of market share, and damage to stock price.

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