Businesses must wake up to global risks to maximise competitive advantage, says PwC

Published at 11:09 AM on 16 June 2014

  •  Industry experts gear up for summit meeting on business resilience

Business leaders are not doing enough to prepare for the risks that arise from an increasingly inter-connected world, such as social instability, debt crises and extreme weather events.

 New and emerging operational threats to business will challenge an organisation’s existing risk management, business continuity, IT crisis management and information security processes, and may not be enough to safeguard an organisation’s long term resilience.

 The warning was issued by industry experts from PwC, the Institute of Directors, Airmic, Marsh and Zurich in advance of the 'Responding to Global Risks' panel event taking place next week.

 Simon Walker, director general of the IoD will participate in the debate alongside industry experts including James Crask, business resilience specialist at PwC.

 The discussion will examine the 'Responding to Global Risks' report, which was written by industry experts from the IoD, Airmic, Marsh, PwC and Zurich. The survey builds on the World Economic Forum’s Global Risk 2014 report, giving company directors tools to manage risk, not only to avoid disasters, but also to identify opportunities to gain a competitive advantage.

 James Crask, senior manager at PwC said:

 “Enterprise resilience is not just about surviving in the present. It is about having the foresight, capability and agility to adapt and evolve. The relentless pressure on businesses to cut costs while enhancing their long-term prospects of survival means that agility can sometimes be at odds with the requirement for robust protection mechanisms.

 “For many, this can result in poorly considered investments in resilience. The ‘buffers’ that contribute to resilience are increasingly seen as an unnecessary expense and are removed to reduce costs.”

 

Organisations that fail to consider the wider factors that contribute towards resilience could be harming their longevity. A mature business will generally mix operational activities, which aim to address shorter-term risks and impacts, with a consideration of a wider range of resilience factors that draws on the characteristics that define the business and can guide its decision-making.

 

Few businesses, however, have identified these wider elements clearly and consistently in every department and at every level. To give an example, creating a code of values is useless if only half the workforce identifies with it, PwC experts say.

 Richard Sykes, Head of Governance, Risk and Compliance at PwC added,

 

 "Simply delivering robust risk management activities like business continuity or IT Resilience, while important, will not be enough to safeguard a sustainable future and enhance reputations. An organisation’s resilience is much more than managing risk well. It is dependent on a wide variety of factors that can be measured and leveraged to enhance responsiveness and agility in the wake of upheaval.

"The most resilient organisations are likely to combine these attributes with a commonly shared set of corporate values aligned to behaviours. They will harness a strong understanding of their business and its context, possess the ability to innovate and also maintain high levels of trust and loyalty from customers and staff.

"Leadership also plays a critical role in building resilience, but this can only have maximum impact if it is allied with the empowerment of those on the 'shop floor'. Trusting workers to make the right decisions and exhibit best-practice behaviours also helps to enhance resilience and prevent reputational damage."

For more information visit http://www.director.co.uk/Content/PDFs/Responding-to-global-risks-web-edition.pdf

 

ENDS

 About PwC

 

  • PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 184,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.

 

 About the IoD

 

  • The IoD was granted a Royal Charter in 1906 to promote high standards on the part of company directors and represent the interests of the business community. It is a non-party political organisation with approximately 34,500 members in the UK and overseas. Membership covers all sectors of the economy and all sizes of business, from start-ups to the FTSE 100. The IoD offers a wide range of business services including business centre facilities, with 15 hubs across the UK, access to business information and advisory services, and specific board-level training, including the most rigorous qualification for business leaders: Chartered Director. For further information, visit our website, www.iod.com, or follow us on Twitter

 

About Airmic

 

  • Airmic represents corporate risk managers and insurance buyers. Its membership includes 75% of the FTSE 100, as well as many smaller companies. The association organises training for its members, seminars, breakfast meetings and social occasions. It regularly commissions research and its annual conference is the leading risk management event in the UK. In 2014 it published the risk management report Roads to Resilience.

 

About Marsh

 

  • Marsh is a global leader in insurance broking and risk management. We help clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. We have approximately 27,000 colleagues working together to serve clients in more than 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and human capital. With more than 54,000 employees worldwide and approximately $12 billion in annual revenue, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @Marsh_Inc.

 

 

About Zurich UK

 

  • Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.

 

 

 


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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