Crisis planning is key for business resilience in an uncertain world: Paul Matthews

While many crises are unexpected, others result from a known potential risk with business owners describing them as the thing that ‘keeps them awake at night’.

Being prepared for and being able to effectively manage a crisis should be a fundamental element of any corporate governance system, and is a core feature of business resilience.

A British Standard on Crisis Management has been in place for several years and many different stakeholders would expect this to be implemented given the significant consequences of not adequately managing a crisis.

The starting point is crisis assessment to identify what sits above normal risk.

Business leaders need to identify, assess and prioritise their particular crisis risks, for example, have they thought about where there are risks within their supply chain, particularly given the increased importance of ethical issues?

This will help to inform a crisis risk map and an action plan to help the organisation navigate the complex issues that follow a crisis.

Preparing, implementing and communicating a crisis management plan will give a framework, providing simple, step-by-step guides to dealing with, responding to, and recovering from a crisis event.

The first few hours of a crisis are often vital, with inaction and a lack of clarity causing further damage.

With this being exacerbated by real-time ‘trial by social media’, the ability to swiftly take control of the situation before is escalates is more crucial than ever.

With businesses facing so many potential threats, identifying the most-likely crises and effectively managing them, could prove to be key to survival.

Crisis planning should sit within an organisation’s resilience strategy, encompassing not only how it will respond and whether the business can recover and ride out the crisis, but also the legal consequences and impact on employees and regulators.

In some cases, well-prepared organisations have even proved able to turn a crisis into a business advantage.

Having been caught off guard by the pandemic and even by the impact of known events such as Brexit, many business leaders now realise that rather than burying their heads in the sand, they must instead have mitigation steps in place so they are ready should the worst happen.

Crisis management training can even be provided, bringing together the operational and strategic team to

stress-test their response to a realistic scenario-based crisis event.

There’s no doubt that, post-Covid, businesses are now more aware of risk and receptive to preparing for potential fall-out – there has never been a more opportune time to seize the moment as a platform for crisis planning.

Paul Matthews is a regulatory lawyer at Clarion