To assess the state of crisis readiness in large organisations, Forbes Insights, on behalf of Deloitte Touche Tohmatsu Limited, conducted a survey of more than 300 board members from companies representing every major industry and geographic region.
The survey shows a worriesome disparity between the risk awareness at board level, and the percieved readiness to deal with the risks. Among other findings, the survey results in 4 major conclusions :
- Disparity between feeling ready vs. being ready: More than three-quarters of board members (76 percent) believe their companies would respond effectively if a crisis struck tomorrow. However, only 49 percent of board members say their companies engage in monitoring or internal communications designed to detect trouble ahead, and only 49 percent say their companies have playbooks for likely crisis scenarios. Even fewer, (32 percent) say their companies engage in crisis simulations or training.
- Damage to corporate reputation ranked top area of vulnerability, followed closely by cyber-crime: Survey participants said the crisis areas that make them feel the most vulnerable are corporate reputation (73 percent) and cyber-crime (70 percent). Two-thirds (66 percent) named supply chain issues, regulatory action, and natural disasters as vulnerabilities as well.
- Board members aren’t engaging with management: Fewer than half (49 percent) say they have engaged with management to understand what has been done to support crisis preparedness.
- No quick fixes: Fewer than one-third (30 percent) of board members whose organisations had been hit by crises said their reputations recovered in less than a year. Sixteen percent said it took four years or more. Financial and operational crises had similar long recovery times.