Risk managers believe the lessons learned from the COVID pandemic will see risk management budgets increased as firms recognise the need for greater future resilience.
The Institute of Risk Management (IRM) has released the results of a wider-ranging survey of its members at the end of last which as to how they felt the Pandemic had affected their business and how well their systems had responded.
It found 89% of respondents indicated that they were satisfied or very satisfied with how their firms’ business continuity arrangements and crisis management plans have responded to the crisis.
They said their firms have moved quickly to adapt their working practices and ways of working, with technology, followed by good leadership and good communications, stated as being the key enablers that helped employees work remotely and safely.
With a move to remote working the survey found 73% of employees believed they will be working from home for most of the time post Covid-19. However, questions remain around maintaining company culture, managing workloads remotely and mental health.
Risk managers said the key activities in the wake of the pandemic were strengthening business continuity management processes, promoting organisational resilience and a rapid transformation to risk-based decision making.
“Overall, most firms are responding well to the crisis,” added the report. “However, some 20% of firms are having difficulty with funding while around one third have experienced reduced sales and revenue.”
Some 28% of risk professionals expect the changes to their roles as a result of Covid-19 to be permanent with 55% of firms are reviewing their risk appetites as a result of Covid-19.
“Robust continuity plans and work done on resilience were stated as being helpful factors in responding to the crisis,” added the report. “Indeed, a greater focus on building operational resilience is the highest pandemic driven change in risk management for 93% of respondents followed by a greater board-level interest in strategic risks at 86% and integration of business continuity planning into ERM at 78%.”
A total of 96% of respondents felt that the case for risk management was strengthened by the pandemic experience. 56% expected their risk management budgets to increase, including 17% who expected a greater than 10% increase.
The IRM added the sectors that have perhaps been worst affected by the crisis, such as hospitality, accommodation, food, arts and entertainment were relatively underrepresented in the survey responses, whereas financial services firms which appear to have been better prepared for the crisis and had a smoother path through it represent 38% of respondents.
IRM Chair, Iain Wright, said: “It is now over a year since the world started to react to news of a dangerous infectious disease that had first taken hold in China. Whereas many in the risk world had perhaps noted pandemic as a real, if rather hypothetical, risk in terms of the human cost of casualties and pressures on health services, the reality turned out to include governments across the world being forced to take previously unimaginable steps in closing down economic activity and human interaction, with massive (if not equal) impacts on organisations of all types.”
He added: “Working from home as a response to a risk has also proved to be widely viewed as an innovation opportunity for future sustainable and inclusive employment practices. And the accelerated and collaborative vaccine development process has not only harnessed innovation to address this pandemic but maybe laid the foundations for the treatment of other diseases and conditions, providing further demonstration of the complexity and interconnections of our risk environment.”
On the anticipation that there will be a steady increase in spending on risk management going forward, Mr Wright said organisations now being very much aware of the value of risk management competency and of organisational resilience.
“This is particularly important in the light of the other risks that must not be allowed to slip out of focus as we respond to the pandemic: climate change, cyber risk, mental health issues etc., are all still there – we just have to address them in a post-pandemic world,” he said.
“Helping organisations recover successfully from this pandemic, negotiating the anticipated economic volatility and preparing for the next crisis will keep the risk profession well occupied into the future,” concluded Mr Wright.