A new report finds that CEOs are far less confident in their organizations’ ability to prepare for, respond to, and recover from crises, as compared to executives who have direct responsibility for crisis management and business continuity.
The report by The Conference Board, developed in collaboration with Agility Recovery and Preparis, recommends that CEOs should ensure that their company has a consistent view of the risks it faces and its state of resilience. The report also encourages boards and CEOs to view resilience as strategically important: it can be a competitive advantage, not just a cost; and as companies focus on sustainability in the long run, they first need to be resilient in the near term.
As the report also points out, operational resilience is becoming increasingly important because the risk environment is evolving, with 90% of resilience professionals (those involved in crisis management, business continuity, and related areas) expecting the threats to increase over the next three years.
CEOs should close the gap between their own and their resilience teams’ understanding of their organization’s preparedness. To do so, management needs to reach a common understanding of the full impact that key risks can have on the organization, the programs in place to address those risks, and the quantifiable financial impact that investing in operational resilience can have.
Paul Washington, Executive Director of The Conference Board ESG Center.
The findings come from a survey of 147 resilience professionals and insights provided at a roundtable that brought together 85 corporate leaders.
Additional insights from the report include:
As risks are rising, companies should revisit where responsibility for operational resilience sits within the organization:
- Half of respondents said that operational resilience often sits with information technology or physical security, which focus on components of operational resilience.
- Most respondents believe responsibility for resilience should sit with a part of the organization that has an enterprise-wide remit and is closely aligned with the business, such as risk management (77%) or operations (56%).
Resilience and sustainability are complementary disciplines and can learn from each other:
- 43% of firms say their resilience and sustainability strategies are only ‘somewhat’ aligned.
- Companies have an opportunity to bring these areas into greater alignment. Many of the environmental and social risks that concern resilience professionals are also the focus of sustainability programs.
- Resilience professionals can adapt and apply many of the organizational, programmatic, and reporting practices from sustainability while avoiding some of the pitfalls associated with sustainability initiatives, such as increased politicization and regulation.
