UK risk management association Airmic and specialist risk consultancy Control Risks have launched “New challenges, new lessons”—a report which examines the actions risk professionals have taken during the COVID-19 pandemic. The report suggests changes to current practices, with the strategic aim of enabling effective resilience in the “new normal”.
The COVID-19 pandemic has amplified the challenge with a siloed approach to business continuity management and crisis management. It has highlighted the disconnect between strategic risk and operational resilience and response.
“New challenges, new lessons” is aimed at Airmic members who have a responsibility for organisational resilience, their top management, organisational peers and external stakeholders.
Its purpose is to explore the challenges organisations have faced during the COVID-19 crisis, highlight lessons learned and still being learned, and make suggestions for changes to crisis management practice to build resilience—whatever the future might hold.
Airmic and Control Risks held a roundtable meeting with the Airmic Enterprise Risk Management Special Interest group in June 2020, as well as a survey of 132 risk professionals in August, for insights on how risk professionals and their organisations fared during the pandemic, and what competencies they require to be future-fit.
Airmic members surveyed in August reported a positive experience in terms of organisational crisis management response, and that as professionals they had the right competencies and mindsets to think and act at an enterprise level, to deal effectively with the pandemic.
They also reported a more important role for risk professionals going forward, and the supplementary knowledge and skills required to achieve this. This was most notable in crisis management and collaborative working generally, and in understanding the interconnectivity of different risks and engaging with business issues.
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 percent of respondents said it was among their organisation’s top three priorities.
This requires striking the balance of involvement of senior leadership (ie, the 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 percent of respondents found it the most useful source of risk intelligence.
This was followed by third-party sources, used by 54.7 percent of respondents. Meanwhile, less than half of respondents relied on tailored advice and guidance such as from risk advisers (45.3 percent) and insurance advisers (22.7 percent).
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 percent believed risk professionals in their organisations have the right knowledge, skills and behaviours. 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 the respondents, 39.5 percent said their organisations were not considering remote working as a permanent option, even for roles that allow 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 percent of respondents.
A significant proportion of organisations (41.7 percent) 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.
Julia Graham, deputy CEO and technical director of Airmic, commented: “As the COVID-19 crisis moves along, leaders need to take the opportunity to pause, record and reflect on the lessons learned.
“Within this context, we conducted a survey to understand what risk professionals have done during the pandemic, and what skills they require to be future fit. Our paper with Control Risks highlights the lessons learned and the suggestions for changes to current practices. These will enable effective resilience in the ‘new normal’.”
Philip Songhurst-Thonet, director, Control Risks, added: “While the pandemic continues to cause huge challenges, organisations are already starting to adapt to a new way of working.
“The survey and paper outline what these changes are and highlight a unique opportunity for risk and resilience professionals to positively influence the strategic direction of their organisations.”
Airmic, Report, Risk Management, Insurance, Reinsurance, Coronavirus, North America