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Risk management

In light of a series of recent high-profile corporate crises, CEOs know they need to act. Survey data appears to support this with many CEOs revealing they are planning major change in this area. And yet another survey reports that many have appeared to baulk at active personal intervention. At first glance there appears to be a discrepancy. A plausible explanation for this may be that we find ourselves now on the cusp of major change. The recognition of the need for urgent action is there but many CEOs remain unclear on the exact details of a revamped policy and their own role within it.

If the CEO is serious about the need for change, then the CEO should take the lead in an effort to forge progress. First, they need to oversee a renewed definition and allocation of responsibilities. Second, they need to strive to communicate the importance of risk management and how the corporate culture needs to change. Third, they must thoroughly prepare their own response as leader as well as the organisation's emergency procedures should a potentially disastrous event happen.

In the view of Alexander Proudfoot, there are seven priorities to consider.

  • Planning: Formulate clear disaster plan.People: Appoint team to run the disaster plan, distinguishing these from business as usual.
  • Transparency: Take the lead in establishing transparent roles and responsibilities.
  • Preparation: Rehearse regularly broad variety of disaster scenarios.
  • Active management: Ensure all levels of management†are involved and actively managing their teams.
  • Measurement: Establish system to measure and monitor risk management performance.
  • Communication: Communicate repeatedly.

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