Integration, CEO Buy-in, Shared Information All Critical to Success of Risk Management Planning

With companies around the globe now identifying business risk management and corporate security as key concerns, Booz Allen Hamilton Vice President Mike McConnell says there is a critical need for integrated internal and external risk management planning, and that strategic security has to be part of a CEO's agenda.

Speaking at the World Economic Forum's (WEF) U.S. Meeting in Washington, D.C. on May 22, 2002, McConnell said companies should adopt a business assurance risk management program that reconciles, synchronizes and integrates a company's operational effectiveness to ensure long-term viability. In particular, McConnell said corporations need to look at how events and/or business discontinuities affect external factors, such as supply chains. The WEF session McConnell spoke at was titled, "The Price of Risk."

"This new enterprise model places an emphasis on collaboration, shared information and a common view to build trust in the organization to achieve effective security and business resilience," said McConnell. "It enhances overall business continuity management and emergency response preparedness." With an integrated approach, McConnell says, corporations will have an effective, consistent response.

Three-Step Process

McConnell explained there are three steps to the development of this program:

• realistically assessing vulnerability;
• planning and implementing risk mitigation; and,
• adapting business for growth and brand protection.

"Running a wargame is an excellent way of addressing a company's status and determining what immediate actions and long-term adjustments can be made," he said. One such action, McConnell noted, is a communications strategy for the public.

Roger Egan of Marsh & McLennan, who also spoke at the WEF session, said that companies that respond well to crisis situations often see an increase in the value of their stock. Conversely, those that don't respond well — particularly with their public communications strategy — often experience a decline in stock value.

Information Sharing Integral

Information sharing was cited as paramount. "Information is the capital of our times and we need to share it constantly, both within and between companies and as the basis of collaboration in private-public partnerships."

McConnell endorsed the concept of leaders being on a "24-hour | 7-day-a-week" mode of responsiveness to share critical information when an event, such as a terrorist attack, occurs with corporations, government agencies and/or institutions.

To enable this, "we need to get priority telephone service so these leaders can have access when — not if — a catastrophe occurs, so pertinent information can be shared," said McConnell.

story posted May 2002