At what point should a business take a deep dive and really look at its core risks?
During our recent strategic considerations for NEDs during a crisis webinar, one of the participants asked that given the fact that risks are changing quite frequently at the moment, at what point should a business take a deep dive and really look at its core risks, given the state of flux at the moment. Should it be doing it now or wait until we’re out of the current phase of this crisis?
Tim Foster, Partner: Given hindsight, it should have been done a couple of months ago. Now is the time to be looking at what the risks and challenges are and getting into some depth behind. It is not about playing lip service to the fact we’ve looked at what our top 20 risks might have been as those top 20 risks from 12 months ago may not even exist now. I think you really need to get into some brainstorming about what those risks and challenges are now, and making sure you’re planning effectively for it.
Do it now, use the risks as a core part of your scenario planning, understand what is happening within the economy, but also what impact that will have on you as an organisation and using that to profile where you need to be in the next 1-2 years.
This high-level strategic discussion used ‘Rethink’, BDO’s global framework, which has been designed around the following ‘stages’ to encourage a broader review of original business models and commercial assumptions that can be used to manage business priorities, address issues and leverage thinking:
- React - ensure that measures are taken to secure business survival in the short term
- Resilience - safeguarding vital elements of a company where necessary throughout the prevailing business environment
- Realise - future benefits of sensible business decisions taken calmly and pragmatically
These three stages can be considered separately to help you as a Non-Executive Director to guide management through COVID-19 over the medium to long-term.
If you would like to discuss any of the issues raised in this article or if BDO can support your business please get in touch. If you would like to contact our speakers please find their details below.
- Matthew White - Matthew is BDO’s Senior Partner and Chair of BDO LLP’s Partnership Council
- Zoe Bailey - Zoe is BDO’s Chief Strategic Officer, a Board Advisor and Strategic Development Specialist
- Tim Foster - Tim is a Risk Advisory Services Partner, with over 20 years’ track record