The current Covid-19 pandemic is having devastating affects world-wide to health and the economy with numbers of confirmed cases escalating on a daily basis and governments intervening with closures of non-essential services and restrictions on travel and movement. This outbreak is already significantly worse than the H1N1 outbreak in 2009, according to Ghislain Giroux Dufort, CMIRM, president of Baldwin Global Risk Strategies Inc, who presented an IRM webinar on the subject organised by the IRM Qatar Regional Group.
There have been huge numbers of emerging negative risks from the pandemic; including the effect on people’s health, impact on healthcare systems, supply chain problems in response to panic buying, transport restrictions and market crashes. However, there are also some opportunity effects including the boost to pharmaceutical industries and virtual technology systems, an increase in supermarket and online sales and delivery companies creating new jobs to meet demand.
Every organisation should be assessing their business continuity exposure, implementing business continuity plans and updating them for the Covid-19 pandemic scenario. There will be several new key areas of risk for organisations such as increased absenteeism and security risks with whole companies moving to remote working on possibly unsecure networks vulnerable to hackers.
One of the first questions discussed by the webinar panel was whether or not Covid-19 was a Black Swan and where the risk should sit within organisations. Alexander Larsen, CFIRM, president Baldwin Global Risk Services, suggested that a pandemic will often be a corporate risk for many industries such as the airline, rail and holiday industry and should be on risk registers at all times. He made it clear however that he did not feel it was a Black Swan event. A Black Swan Event is an unexpected, rare event but a pandemic should have been a foreseeable event as scientist simulations have been in place for years.
However, the combination of several events during this Covid-19 outbreak could be considered a black swan situation; with border closures, schools and non-essential service closure, oil prices affected due to the situation with Russia and global markets crashing. (even these can be predicted however and are often called Grey Rhinos)
Larsen also suggested that in an interconnected world with an ever growing population, it is quite reasonable to expect companies need to consider, as an emerging risk, whether pandemic situations will now happen more often, or indeed, if this virus evolves in a way the seasonal flu has.
Among the key messages from the panel regarding preparing for a pandemic and developing a plan was the importance of crisis communication. Dylan Campbell, Enterprise Risk Manager at Q-Chem highlighted the importance of communication internally, ensuring the right information gets to the right people at the right time. He suggested that communication should also be a two way process whereby staff are offered the chance to question and comment.
Technology not only can be a vital tool for continuity but also for efficiency in the future. It is also important to note however, that several technology services have been struggling under the weight of the increased demand globally.
Some interesting examples were shared of organisations able to react and adapt quickly, possibly due to pre-existing planning, changing their objectives and plans in response to the pandemic. Examples included Louis Vuitton moving from making perfumes to hand sanitizer which will no doubt improve their reputation and allows them to stay open and keep jobs. Other manufacturers such as GKN are moving to help create medical devices too. Even during a time of crisis, some organisations are clearly able to identify and take advantage of opportunities to increase the likelihood of survival but also maintain their reputation.
Giroux Dufort said pandemics have been forecast for years although there are so many unknowns related to these on severity and effects. He suggested that organisations look at key business services and the human dependency on these services. Questions should be asked as to whether they can be moved to remote services and how it will impact clients. It is also important for organisations to consider Government actions. How will they affect the economy and public services and therefore the organisation?