A crisis of confidence business continuity


A crisis of confidence

Global Board survey highlights the need for critical incident response plans to be better prepared and able to deal with inevitable crises

Global Board survey highlights the need for critical incident response plans to be better prepared and able to deal with inevitable crises.

• It is not a matter of ‘if’ but ‘when’ a crisis will happen

• The organisations of more than half the directors surveyed have experienced a crisis

• More than 70% of the organisations took up to three years to recover reputation and operations following a crisis

• 16% took four years or more.

What is the definition of a crisis?

When hearing the word ‘crisis’, the first thing many people think is that there has been a natural disaster.

However crises are any ‘critical incident’ that threatens the value and reputation of a company - and increasingly its survival.

Critical incidents range from cyber-crime to workplace violence, through productivity to supply chains.

The alarming reality is that studies show a company can expect a value-destroying incident at least once every five years. It’s no longer a case of “if it happens” but “when it happens”.

When these incidents occur, it is critical that the leadership team is quickly able to minimise the impact and act to swiftly to resolve the issue efficiently and effectively.

The biggest strategic issues are reputation and cyber security.

The recent Deloitte global survey of 317 board members shows that almost 60% of businesses in the Asia Pacific region, including Australia, take between one to three years to recover from a crisis. And almost 20% take more than four years.

Globally the two most serious threats to a business are the loss of reputation, and the impact of cyber crime. In the Asia Pacific region more than a third of the board members surveyed believe these are their biggest threats.

One of the most significant findings of the survey is the lack of preparedness to respond to a crisis. Despite three quarters of board members globally believing their organisations can deal with a crisis situation, less than half have the confidence that they are adequately prepared. In our region those confidence levels sit at 34%.

The potential to lose both customers and shareholder value from the loss of reputation due to a data breach, denial of service, corrupted and/or stolen assets, is significant.

At another end of the spectrum, there are the environmental threats of natural disasters and workplace violence. Only 37% of the APAC businesses surveyed had a crisis resolution plan in place for a natural disaster to ensure a quick and effective clean-up process, and enable the business to return to normality relatively efficiently. Forty per cent of Asia Pacific based big businesses had a plan for workplace violence.

How confident are boards in their businesses crisis management plan?

Given that more than half of the big businesses surveyed (57%) have had to action a response plan, it is important they ensure they have the right crisis action plan developed, have practiced a simulated testing and are skilled at implementing the appropriate crisis response plan.

These plans and the designated teams should be supported by leaders of all key departments to ensure that the risks and impacts across all departments are considered.

How can businesses minimise the impact of a crisis and risk of permanent damage?

Given that stress levels have a significant impact on our decision-making abilities in times of crisis it is absolutely critical that a pre-formulated, thoroughly tested response plan is in place to ensure the business takes quick action. It also ensures that the key regulatory requirements are checked and the right contacts and regulators are advised.

Less than half of the APAC survey respondents noted they have a defined set of crisis response actions in place, and a concerning 34% ‘weren’t sure’.

For a crisis response plan to be effective it is imperative that both the Board and the leadership team communicate openly and the leadership team is confident that the plan is well rehearsed in the wider business to ensure that employees know the correct leaders to contact in a crisis and the correct actions to take.

It is always helpful to have access to an external crisis advisor to assist develop, test and implement the crisis recovery and resilience plan. Crisis leadership is a collaborative effort.

With diverse crisis response leadership teams businesses can ensure swift incident response with knowledge and lessons learned from experiences being channelled back in to this team for ongoing improvement.


   i 2013. Cockram, van den Heuvel, Nicholas. Crisis Management: Key themes for success. Strategic Crisis Decision-making: The psychological tripewires and tramplines. Steelhenge Consulting Ltd. 

  ii Source: 2016. Deloitte Touche Tohmatsu and Forbes Insights global survey, A crisis of confidence.

  iii Source: 2016. Deloitte Touche Tohmatsu and Forbes Insights global survey, A crisis of confidence.

  iv Source: 2016. Deloitte Touche Tohmatsu and Forbes Insights global survey, A crisis of confidence.

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About the survey

The report “A crisis of confidence” is based on a 2016 study by Deloitte Touche Tohmatsu Limited and Forbes Insights which surveyed 317 respondents who identified themselves as non-executive board members of their organisations from around the globe. The report highlights their business crisis management views.

Among respondents’ companies, 16 percent had annual revenues between US$500 million and US$999 million; 47 percent were between US$1 billion and US$4.9 billion; 23 percent were between US$5 billion and US$9.9 billion; 12 percent were between US$10 billion and US$19.9 billion; and 2 percent had annual revenues of US$20 billion or more.

Respondents were divided among three regions: EMEA (32%), Asia/Pacific (32%) and the Americas (36%), and represented companies from all five major industry sectors:Financial Services, Consumer & Industrial Products, Technology/Media/Telecommunications, Life Sciences & Health Care, and Energy & Resources.

Organisations and their board members around the world recognise the danger crisis brings and the importance of preparing for it. 

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