U.K. business owners are better prepared than many of their global counterparts when it comes to planning for key business risks, according to a new International Business Report from financial advisory firm Grant Thornton. The survey of 7,200 business owners across 32 countries asked companies whether they had formal plans in place for dealing with key risk areas such as the loss of suppliers or customers, loss of key personnel, disaster recovery and security of electronic information.
But only 26 percent of U.K. businesses have a formal procedure in place to deal with a potential reputation or media crisis compared with a global average of 35 percent. Taiwan fared much better, topping the table with 61 percent, followed by Turkey at 57 percent.
“It is staggering to believe that so few business are prepared to deal with potential PR disasters,” says Alysoun Stewart, head of Grant Thornton’s strategic services group. “One only has to think of the food contamination scares involving Cadbury and Nestle and the lifelong associations they carry to realise the importance of the issue. Furthermore the recent product recalls from Mattel prove that businesses in any industry are susceptible to a potential media crisis.”
U.K. businesses appear to be doing well in preparing for risks emanating from modern and high profile threats. More than three-quarters (77 percent) of businesses have documentation in place to deal with disaster recovery and for a major IT failure, putting the U.K. in fourth and fifth place respectively and comparing favorably with global (and EU) averages of 57 percent (57 percent) and 61 percent (63 percent).
In addition, 81 percent of business have a plan in place for dealing with a breach in their security of electronic information, 80 percent on the privacy of information and 73 percent for the loss or destruction of property. These figures are good news for U.K. business and are above the EU and global averages; for example a meager 55 percent of EU businesses are prepared for a loss or destruction of property and 74 percent of global businesses are ready for a breach in their security of information.
Adds Stewart: “Risk management should be an integral part of every firm’s strategic management, so it is encouraging to see so many U.K. businesses appearing to take the issue seriously. Identifying fundamental risks and taking steps to prepare for them is essential for minimizing the impact of a disaster, which is key to the continuity of privately held businesses.”
In addition, only 53 percent of UK businesses have a formal mechanism in place in terms of succession planning. Although higher than the global and EU averages of 50 percent and 41 percent respectively, that still means that almost half of businesses remain inadequately prepared.