The International Monetary Fund has reported the global economy will contract by 3% this year as countries around the world shrink at the fastest pace in decades.

COVID-19 has been described as the worst since the Great Depression of the 1930s and the current pandemic has plunged the world into a "crisis like no other" (April 2020).

fds CEO Jo Haigh shares her insights on how businesses can learn from the crisis and the importance of instigating a robust risk management practice.

Something which is right at the top of everyone’s agenda in the current climate is risk management.

I have been working with boards for over 30 years and I currently sit on 7 different boards as Chair and non-executive director, so I can tell you of those boards, only one actually had a pandemic on their risk register. It was marked as low likelihood, high impact but there was only one out of 7 which I am aware of.

What struck me about this, is the speed in which they have been able to deal with the impact COVID-19 had on their business. They were able to implement a pre-agreed action plan and within hours of the outbreak and lockdown restrictions, they had their manufacturing business up and running in a completely different way. Their response to the situation has been absolutely amazing.

On the back of this, within three days they had applied for and were successfully granted the COVID-19 business loan. I’m not saying this is just as a result of the risk management process in place, but it must have helped them in one way or another.

This doesn’t mean that the other companies which I work with aren’t amazing, they are! I don’t think that any of us ever had imagined in our life that we would see what has been happening.

So, risk management will now be much higher up on the agenda than it ever was for me and probably many of you. However, avoid death by spreadsheet and think carefully about what it is that you are going to look at.

Funnily enough one of the things which I like to do in my boardrooms when we are talking about risk is to give the board ownership and review of the top five high likelihood, high impact risk factors. But also, I like the board to look at the low likelihood, high impact risks and it was, of course, the board which I mentioned earlier, which actually had this on their risk register. We did talk about it, but we probably didn’t do it the justice that it deserved, because we never thought it would really happen.

I am no risk management expert and there are plenty of people out there who are a lot better than I am in this subject. However, I would say that I have realised that you need to revisit your risk register. Look at how you are categorising those risks into internal, external, technical and then, of course, the unforeseeable.

I would also like you to think about cascading down those risks into your various parts of your organisation. Assess who has control, who is managing it and constantly keep this up to date.

The best thing I saw with the exemplary manufacturing business which is outperforming those others is the business continuity plan they had in place, almost down to a T of what everybody would do, how they would do it and how it would be facilitated. So, if I’ve learnt nothing from this, and I think I am learning a heck of a lot like everyone else is – is look at your risk register again and consider bringing the low likelihood, high risks to the board. Make sure this is kept up to date and check your business continuity plan for failure rates.