MANAGING RISKS IN 2020 – WHAT ARE BOARDS THINKING ABOUT?
2020 has taken the world by surprise. Globally, we have been tackling a pandemic that has created mass disruption to lives and business and has been a public health emergency. We have seen shifts in political allegiances, natural disasters giving rise to increased climate change advocacy and a deep desire for social change, most recently represented by the Black Lives Matter movement. For boards, risk management has become a major priority. In this article, we will consider a few of the major themes demanding the attention of boards as organisations attempt to navigate these challenging times.
Crisis response
The unprecedented nature of the global pandemic has seen many businesses forced to dramatically change their approach to operations overnight. Some businesses have thrived, while others have collapsed under the pressure or the sheer impracticability of running a business with border closures, supply chain disruptions, social distancing and onerous public health compliance requirements. Having an adequate crisis response plan in place should remain high on any board’s agenda and many lessons can be learnt from the issues faced this year.
Crises often stem from unexpected developments within a business, be it the departure of a board member or prominent manager, an environmental disaster, a scandal resulting in a dramatic alteration to the business, or government intervention into the way the business can run. In the event of such an incident occurring, those companies with appropriate crisis response mechanisms in place will be best placed and will experience the least disruption.
Oct-Dec 2020 Issue
Clifford Chance