Firms are facing new risks due to pandemic

MANAMA: In the times of Covid-19, corporate leaders like board members and management need to ‘apply and explain’ rather than ‘comply or explain’, a Bahrain-based expert has said.

The former approach means that organisations are required to take certain measures, but also to explain the measures and their results, whereas in the ‘comply or explain’ approach, it is left up to the market to decide what actions are appropriate for individual companies. 

According to Grant Thornton Abdulaal, business risk services partner Sunil Thakkar, drastic changes to working arrangements around the world and ever-changing expectations of customers, employees and governments mean it’s time to examine the variety of risks facing the organisation. 

With the rising impact of Covid-19 being seen worldwide, all industries will face significant disruption to their supply chain, workforce and cash flow, he said during a webinar organised by the audit and advisory firm last week. 

From supply chain to working capital, it is critical that organisations understand and strategise against their unique level of vulnerability in order to keep moving forward, Mr. Thakkar warned.

“Continuity is a comfort, especially in times of crisis. By remaining agile and alert, business leaders can take steps to build resilience into their operations and mitigate the impact.”

Calling on enterprises to proactively review their governance framework, the expert said key actions to be taken include establishing a crisis management team, business continuity measures, liquidity management, remote access to employees, communication between board and senior management, proactively approaching vendors and customers for contract negotiations and continuous monitoring of regulatory compliances.

The governance of decision-making based on informed and managed risks in times of crisis may require trusts to introduce emergency risk appetite statements.

“In times of crisis, the risk appetite of an organisation increases. While making key decisions, ensure that you have the best information to support them but accept that not all your choices will turn out to have been right, once the pandemic is over.”

The webinar titled ‘Supporting our clients in navigating the new order’ was launched by the firm’s senior partner Jatin Karia who said that while the pandemic has changed many things but on a positive note it has shown us all new ways of working and new ways of thinking.

Mr. Karia urged participants to follow all directions given by the authorities including ‘social distancing’ which would help in ‘flattening the curve’ in dealing with the pandemic.     

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