KPMG has identified seven key strategic risks that companies and chief risk officers (CROs) face this year.
KPMG partner Kelly Watson recently responded to questions from Bloomberg BNA’s Yin Wilczek in an article “Companies Face Evolving and Escalating Risk Areas in 2016, KPMG’s Kelly Watson Says”
This is what Kelly had to say about Crisis Management:”Regarding the elevation of crisis management on the CRO’s agenda, while organizations have always faced the possibility of critical or catastrophic events in some form, as companies are now more connected and global, they face even greater threats of disruption to business operations from man-made or natural disasters ranging from cyber-attacks to supply chain disruptions stemming from geopolitical turmoil. And, because organizations are more interconnected, complexities can occur now in a more widespread and rapid fashion in the aftermath of a crisis”
This is something that I have repeatedly said in my presentations:”The velocity or speed at which messages now flow in real-time has added another dimension to Crisis Management that demands robust thinking and actions”.
This implies that:
– Organizations should think wider about the potential risks they face right now and the risk on the future horizon;
– Organizations should have robust compliance programs, but that compliance should go beyond today’s minimum standards, and also focus on best practices, especially in the field of Crisis Management;
– Organizations should plan with “split – seconds” response in mind, which is only possible through adequate planning, preparation and training BEFORE a crisis hits.
Earlier in the article, Kelly said: “However, some more complex and evolving risk areas including data security, technology risk management and crisis management have been recently escalated”.
There are always new risks emerging, but the key lies in identifying the interaction and impact of these risks with each other. You cannot see one risk in isolation and should always adopt a systems thinking perspective, which is exactly what I will try and show at my next training in Johannesburg.