Seminal Cataclysmic Events and Moments - Jo Haigh

These words generally suggest one off unforeseen events which affect the individual or the company; this is probably more likely to be negative in effect but could, of course, be positive.

This last two years has seen its fair share of seminal moments, mostly negative ones, ranging from unprecedented economic disasters and extreme weather conditions to natural disasters of such proportions as to bring the airways to a standstill.

Dealing with one event in any one year is difficult enough. Dealing with a multitude, as we have had to of late, has proved an impossible task for so many business owners.

This is particularly so as one issue has so rapidly followed another, barely giving the struggling company time to reposition itself never mind recover.

So, as lightning does appear to be striking twice or more, is it possible to install any form of conductor to prevent, at best, future damage and, at worst, melt down.

Risk management should be seen as much more than a legal requirement or even, as I have seen, a fashion statement to meet some generic corporate governance objective.  

Taking time out to look at risks, and what steps need to be taken to eliminate or minimise them, should be a ‘must do’ not a ‘nice to do’.

Time, that most valuable of commodities, must be allocated proportionally to risk management. The internet provides a plethora of tools for the novice risk manager but a simple matrix of;

High Risk, High Impact

High Risk, Low Impact

Low Risk, High Impact

Low Risk, Low Impact

Works for me as a start at least.

Once analysed a plan of action assigned against time gives you a rudimentary risk ‘register and remedy’ process.

Realistically there will often be a residual risk, possibly this is insurable but possibly not so, if the latter, quantification on a financial basis of exposure should be part of the process.  

No one person is able to foresee any and every risk and, therefore, it would seem sensible to make this a board and / or senior management role. Neither is this a one off action and, in those businesses who see this as a ‘must do’ it may even be a monthly routine to review and revisit any inherent and future risks.

Risk management is about communication, internally where appropriate, but it’s also about assigning responsibility for actions and making those individuals accountable.

 Jo Haigh
Head of Corporate Finance for MGR
www.mgr.co.uk
Jo.haigh@mgr.co.uk
0844 826 2851 / 0207 644 9674 / 07850 475878
www.jo-haigh.com
http://www.linkedin.com/in/johaigh