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Risk Management and Business Continuity - Mutually inclusive

Do you plan for the unexpected, or do you choose to manage problems when they arise? In a business context failing to plan for addressing factors that affect the health of your business is likely to lead to poor performance or, worse, the demise of the business.

Risk Management (RM) and Business Continuity Management (BCM) are like two peas in a pod. Pro-actively implementing measures to ensure the smooth, optimal running of your business under normal circumstances, and to mitigate the effects of any problem or crisis that could potentially harm your specific business is the hallmark of a good corporate citizen. And it simply makes good business sense.

Sadly, the consequences of a lack of proper risk management do not impact on businesses in isolation. It has a negative ripple effect on the lives of ordinary South Africans and our country’s socio-economic development.

Given the high failure rate of start-up businesses and the complexity associated with RM and BCM, Proudly South African, together with CGF (Corporate Governance Framework) Research Institute (Pty) Ltd, a strategic partner of Proudly South African and the driving force behind a comprehensive series of reports on various corporate governance-related issues, have again joined forces to sensitise businesses – big and small – on the importance of anticipating, planning for and actively managing business risks to ensure that businesses can continue to prosper, and contribute to social and economic growth in our country.

“Whereas Risk Management can be defined as the business process that responds to every conceivable type of risk in any organization, Business Continuity Management focuses on those aspects that may disrupt or impact heavily on a company’s strategy, operations, key products and services”, explains Terry Booysen, CEO of CGF (Corporate Governance Framework) Research Institute (Pty) Ltd.

“Through BCM a company pro-actively plans what needs to be done in advance to protect staff, the premises, information, et cetera in the event of a worst case scenario. For example, a public utility such as a municipality, insurance brokerage or a bank, should have data back-ups of all its client transactions held in safe-keeping off-site so that all client profiles can be reconstructed with minimum, if any, data loss in the event of a fire or other disaster destroying the master files. As such, BCM must be viewed as a subset of an organisation’s overall Risk Management and Planning”, he elaborates.

The acclaimed King II Report on Corporate governance for South Africa, 2002, confirms that “Sound Risk Management and internal control frameworks, tailored to the specific circumstances of the company, should be part of the daily operational activities of a company and should not be viewed independently of normal business activities.” Not surprising, the principles of BCM are the same, irrespective of the size or type of business. BCM should form an integral part of the organizational strategy, Enterprise Risk Management (ERM), planning, organizational policy and development, program management, business engineering and tools.

“There is simply no alternative for good corporate governance. Risk Management and Business Continuity Management should, clearly, become a way of life for ensuring the sustainability of businesses in South Africa,” says Manana Moroka, CEO of Proudly South African. “We are indeed fortunate to have Proudly South African companies, such as CGF, that have made it their business to ensure that this valuable information is brought within reach of all South African businesses in an effective, easily digestible manner ”, she says.

“It is especially critical that small or marginal businesses which are so vulnerable to risks, but may find the costs associated with RM and BCM prohibitive understand that failing to plan for business risk in this context is tantamount to risking failure. Pro-actively seeking advice on RM and BCM and integrating the basic principles into the business’s DNA from the onset is the most sensible option for any business intent on staying in business in the medium to long term”, she asserts.

For more information on this captivating subject, or to order the relevant reports, contact Terry Booysen on 011 476 8264, e-mail: tbooysen@cgf.co.za or visit www.cgf.co.za

More information on the Proudly South African Campaign is available from 011 327 7778, or visit www.proudlysa.co.za