When the pandemic hit in the first quarter of 2020, many businesses were not prepared for a disruption of that magnitude. According to the consulting firm Mercer, 51% of companies worldwide didn’t have a business continuity plan (BCP) in place in the early stages of the pandemic before nationwide lockdowns. It took a long-term disruption like COVID-19 for many companies to extend their preparations for a disaster beyond a crisis response plan. Today, a more comprehensive business continuity plan has become a measure of good governance - and even a competitive advantage. However, a recent poll by KPMG showed that for a majority of organizations, business continuity management is still in the developing stages and is more reactive than proactive.
A safety net
Disasters and disruptions for corporations can come in many forms. They can be due to natural catastrophes or man-made threats, like fires, floods, earthquakes, a pandemic, a cyberattack, a security breach, or even a power or network outage. Business continuity planning is the framework that helps a company to prevent, respond to, and recover from such operational business disruptions. The crisis management and disaster recovery plans are part of the overarching business continuity management strategy. It is not enough to have an immediate emergency response to the issue at hand. Companies also need a longer-term strategy that prepares and allows them to deliver to customers during the moment of crisis and for as long as the interruption or its consequences last. Corporations can rely on the ISO22300x standard describing good practices on business continuity and resilience for the development of their BCP.
Quick recovery
When a crisis interrupts business operations, it is likely to affect the delivery of services or goods, and thus the business bottom line. However, the potential reputational damage from a flawed response and strategy can have an equally big impact in the long run regardless of who or what caused the disruption: internally, externally, company-specific, or widespread, like the pandemic. A proactive BCP streamlines the operational response, controls the company's reputation, and stimulates a quick recovery.
Leading by example
What is the role of the board in effective business continuity management? While business continuity planning itself is usually considered to be the responsibility of management, the board plays a key role as well. Apart from the fact that a comprehensive and tested BCP is a contractual or regulatory requirement in most companies, the top table also needs to ensure and audit that the developed strategy is aligned with the broader risk and business strategies of the corporation. What is the reporting level and frequency during disruption? Does the BCP incorporate the human factor next to the operational priorities? The latter was highlighted during the pandemic when employee safety and well-being were under pressure.
Equally critical when a crisis strikes is that the board of directors itself is able to perform the needed tasks. Board continuity is an essential part of business continuity. Something as simple as seamless and safe communication between, to, and from board members can become complicated during interruptions or breaches. During the COVID-19 pandemic, boards had to switch to video conferencing overnight. When a cyber-attack occurs, digital communication of the board can increase the security risk even more. An effective BCP accounts for these situations.
Better safe than sorry
When disaster hits, the initial response focuses on crisis management. However, looking beyond the initial disruption with the help of a thorough business continuity plan can secure critical operational continuity. A board of directors and management team that are in control when facing adversity gives confidence to employees, stakeholders, and customers.
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