Business leaders at Eqate Risk Services have welcomed the latest findings of a Covid-19 crisis survey conducted by risk management industry experts.
The global pandemic presents the opportunity to put risk management at the top of the agenda and businesses become more resilient in the future says Chris Charman, Technical Director of Eqate Risk Services.
Fellow of the Institute of Risk Management (IRM) and former deputy chairman of the organisation, Charman believes the current Covid-19 crisis has been a worldwide “wake up call” highlighting the need for governments, businesses and organisations to be more risk aware.
Charman revealed he and IRM colleagues had previously warned how a global pandemic, like Covid-19, would have far reaching repercussions predicting widespread loss of life, the overwhelming of health services and mass disruption to supply chains, alongside the associated devastating economic impact.
The risk management expert was involved in leading research into the impacts of global pandemics and some of the predictions forecast by him and the team he worked with have occurred in the current Covid-19 crisis. A fact he finds “frustrating” given the prior warnings, which he feels have been ignored by some governments globally, who were largely unprepared for the scale of the coronavirus outbreak.
Charman stressed it is imperative industries recognise the importance of risk management, now so more than ever.
He stated: “This is the biggest opportunity for society and governments to understand the value and importance of risk management, to pay attention to it and do something about it – because this pandemic has affected everybody.”
Charman and his colleagues at Eqate Risk Services (ERS), welcomed the recent results of the survey titled Covid-19 Pandemic Global Risk Management Response conducted by the IRM and The Institute of Operational Risk, which received responses from over 950 members worldwide.
The objective of the survey was to discover how risk management functions were responding to the crisis, whether plans in place were working, how the situation might affect the development of the profession and what should be learnt from it.
The resulting report revealed 32% of organisations had not considered pandemic risk or anything similar before it happened and one fifth of organisations who considered pandemic risk didn’t then do anything about it.
Charman said: “It’s very disappointing that one fifth considered pandemic risk but did nothing about it. The question is “why not?”and the answer will probably be that ‘it costs too much’. Some of these survey statistics are shocking. However even though some respondents had not thought through a global pandemic as a possible cause, they have thought through the resultant impacts on their business.
“This pandemic has highlighted how it’s essential to have a plan that is designed to respond to a major incident, irrespective of whether that’s a fire or an explosion, simply something which would prevent your business from operating. Businesses should draw up contingency plans detailing how they would deal with such scenarios. As well as keeping the workforce and management fully up to speed with what is required of them.
“If you have undertaken such an exercise and have that thought process in place, it does give you the mental agility to deal with a curve ball like this pandemic. Every organisation should have a disaster recovery plan in place.”
Following previous pandemic research conducted in 2011, Charman and the then Chief Executive of the IRM, Steve Fowler, gave presentations at leading risk management conferences in Europe and Australia attended by thousands of delegates worldwide.
Charman said: “Our findings were based on a model that looked at the impact of a SARS type infection which gave a death rate of around 10%. This predicted the overflowing of morgues, the inability of hospitals to cope, supply chain issues – exactly as we have seen here during the current pandemic. All those sorts of things were considered in our original research, alongside the breakdown of the social fabric of society and the massive economic impacts.
“However one of the biggest things highlighted was having the right (in date) equipment in place with regards to personal protective equipment (PPE). Pretty much all of this was borne out by Exercise Cygnus, which warned the British government back in 2016 of the potential impact of a pandemic. It made it clear we would struggle with supplies of PPE and we would need to have stockpiles of such items in place and this warning was sadly ignored by the government.”
Having conducted previous pandemic research then witnessed what’s currently happening globally, Charman admitted from a professional standpoint he finds it “extremely frustrating” and believes the UK government should have acted harder, sooner during the outbreak by introducing stricter quarantine measures, like New Zealand, and by conducting much more testing.
He stated: “Now the economic impact is monstrous and very, very long term. Risk management is about prevention but no one likes to do it, they would rather take the risk.” “Yes, putting harder borders in place earlier and quarantining arrivals would have had an economic impact, but such actions would have minimised the massive damage to the economy we are now seeing. Controlling the problem proactively may have led to an ‘upside’, in the form of economic opportunities such as the supply of goods and equipment to other nations.
He said he absolutely welcomed the IRM survey report and highlighted how it is important to learn from its findings including the need to budget for all eventualities.
“It might be another 80 years before we have something similar to this pandemic but equally it could be Covid 21 next year. This has really woken people up to the fact that the pandemic threat is a real, live risk and we need government and local governments to build resilience into both our society and our economy. It has to be done collectively and we have to be led by a risk aware government
“Oftentimes risk management is not properly represented at board level. I am hoping that the pandemic has made people realise risk management is much more important than perhaps they thought it was. If a risk manager says they need money to put processes in place, hopefully they will get more attention now.
Large sums of money are now being spent on a vaccine as a risk management tool to manage the problem.”
Going forward he hopes attitudes to risk management and its business benefits will change and improve the Risk Culture in companies, something Charman’s championed for a long time.
He concluded: “It is about trying to change the culture inside an entire organisation to make risk awareness the natural state of mind. This has always been a struggle because often (and sadly) the risk management process touches only on a few people inside an organisation.
“This time this societal wide impact of the pandemic has affected us and our culture is different now, with social distancing, masks and travel considerations as examples. This has to highlight risk management to everybody, which should help change Culture because at last we are all involved dealing with the same risk.
“At the IRM we’ve talked for a long time about risk culture, how to change risk culture and now the world has had a wakeup call, with a risk that affects everybody and we all have to get involved.”