Judging from comments this website continues to receive, organizational business continuity and PS-Prep strategy planning groups have a full time job reminding and/or convincing upper management to invest in proactive risk management practices throughout the entire organization.
The results of a recent study entitled “The Risk/Earnings Ratio: New Perspectives for Achieving Bottom-Line Stability” may be just what the doctor ordered to shed some light on this topic — especially, given the fact that many organizations today continue to reduce budgeted capital and other resources across diverse functional areas and operations, including physical risk management.
By adopting strong risk management practices, the findings of this study suggest that a company will reduce not only the frequency and severity of these potential loss exposures, but also may reduce volatility of those earnings. In other words, given the strong correlation between management of property risks and earnings stability revealed in these survey results, it would appear that cutting back on risk management resources may instigate potential loss of earnings and more volatility of those earnings levels – all to the detriment of shareholder value.
This study of risk management and the potential impact on earnings stability was commissioned by commercial and industrial property insurer FM Global and was conducted by Oxford Metrica, an independent strategic advisor to FORTUNE 500 companies.
Check this study out and perhaps you will have some additional resource material to support your BC/DR team’s efforts to get upper management more on board to support and fund your team’s disaster preparedness and readiness efforts today.