Risk experts on how to manage under the Covid-19 crisis
Now more than ever, organisations need to look within to paint a risk landscape for themselves as the Covid-19 crisis unfolds. These are the recommendations in a new opinion piece put together by two risk experts in South Africa.
Vanessa Thurlwell is a Senior Risk Consultant at Mondial Consultants in Gauteng, while Craig Kent is Head of Risk Management at Aon South Africa. The duo have used more than four decades of risk advisory experience between them to provide South African businesses with a set of recommendations for their risk management in the near future.
The central message is to study one’s own organisation. The first recommendation, for instance, is to take stock of the contextual changes and stakeholders involved in an individual organisation. So a business needs to evaluate its ties with countries most affected such as China, South Korea, Iran and Italy.
China is among South Africa’s biggest trading partners, which means that it is likely to be on the list of partners for many organisations. Businesses also need to examine how other stakeholders are going to be impacted, including customers, suppliers and, perhaps most importantly, employees.
One effective method in would be to “map the stakeholders according to their level of power or influence and level of interest. This will determine how we prioritise and manage them and communicate with them,” write Thurlwell and Kent. Once this is done, the next step is to carry out the risk assessment.
This involves anticipating the economic fallout to come, and keeping tabs on the global and governmental response. Risk assessments will vary in severity depending on each individual organisation. For instance, the travel and tourism sector has been hit with a number of immediate disruptive risks, while other organisations have not been as directly impacted.
Businesses that haven’t had direct disruption so far must not fall into a false sense of security, according to the consultants. They must evaluate the risks that might emerge in the near future and prevent them if possible, or take mitigating measures if not.
“In the South African context, the fact that we were later in the infection spectrum allowed us to learn from experiences of other countries and organisations, allowing us to attempt to reduce the impacts through being more on point with our controls,” explain the authors.
The third key point put forth by Thurlwell and Kent is that businesses need to examine their individual risk appetite and tolerance going forward. A plethora of risks is likely to emerge as organisations take steps to navigate the upcoming challenges, businesses will have to weigh the risks and benefits at each step.
“What is critical in going forward is to understand your organisation and what the best possible processes and controls are that can be put in place, so we are prepared to mitigate both immediate and the long-term impacts. We cannot prevent these crisis events from occurring, but we can successfully mitigate the lasting impacts through feasible protection of our organisations through resilient preparation,” conclude the authors.
