Asian risk managers adapt to COVID-19

Franck Baron, chairman of Parima and general manager, risk management and insurance at International SOS, says the coronavirus pandemic has been a major test for members’ business continuity plans.

Since most countries went into lockdown, the association has been holding weekly ‘Dynamic Huddles’, using Zoom technology, to allow risk managers to meet and discuss issues relating to COVID-19 in a virtual setting.

While unable to offer specifics, due to Chatham House rules, he said there were common themes despite the fact members spanned all countries in Asia and a wide range of industries.

“The very first thing people raised is the struggle they are in to adapt their business continuity plan to face this pandemic situation. Even the ones who are quite comfortable or proud of the quality of their BCPs. It’s like Mike Tyson says, everybody has a plan until they get punched in the face.”

The Zoom forums have also become a safe place for individuals to share their fears and concerns surrounding the virus. As Baron explains, COVID-19 currently touches every aspect of a risk manager’s personal and professional life.

“It has been cheering to see others expressing themselves and offering help and advice to others in terms of sharing tips . There is a personal stake in a lot of these conversations and risk managers want to share the emotional and psychological aspect of it.”

“As a risk manager with 25 years experience,” he continues, “it is the first time I have seen a risk situation which is impacting all countries, all industries and all the individuals you know, both professionally and personally. It is all-encompassing and there is no place for rest.”

After the pandemic

While very much dealing with the here and now, risk managers across Asia are also starting to think about life after the pandemic threat has passed. Baron believes there will be a distinct before and after COVID-19 and that some risk practices will evolve.

“Businesses are going to change,” he says. “My hope is that organisations will reconsider the ways they were managing their supply chains, practices such as just-in-time, concentrating all your manufacturing in one country and not knowing who are your tier 1 and 2 suppliers.”

“All of this will change. And hopefully organisations will seize the opportunity to change this and to make their supply chain more robust.”

He also thinks it will become less challenging for risk managers to talk to senior management about black swan risk scenarios. “In the past this was not a very good conversation because these Armageddon-type scenarios were seen as extremely unlikely by top management.”

“COVID-19 has shown us they are a bit more likely and we need to have all the business planning in place to face this high magnitude type of event again in the future.”

“None of the major risk surveys at the start of this year mentioned pandemic scenarios,” he adds. “It’s not just about trying to assess risk scenarios - because you can’t always see what is coming. It’s more about making sure you have the proper resources and skills to adapt in order to increase the resilience of an organisation.”

Baron sees the pandemic as an opportunity for the risk profession to raise its game. “There is definitely a growing understanding that the risk manager is at the core of helping their organisations adapt to different scenarios and it really is more about the risk agility and resilience of organisations, rather than having a plan for each and every eventuality.”

“COVID-19 should be seen by all members as an opportunity to demonstrate how they can add value they provide to their organisations,” he adds. “They need to redesign their role and be more part of the strategic conversation taking place within their companies, in a positive and concrete manner.”