The recent volatility on the global markets is a timely reminder for organisations to develop or review their business risk management plan, mitigation strategies and risk appetite.

At least annually or immediately following any major event, organisations should review their business risk management plan. As the global markets have shed significant value over the past week, many companies may soon feel the pressure from ratings agencies such as Moody’s, Standard & Poor’s or Fitch.

It is important to consider how a ratings downgrade would affect your organisation or perhaps more importantly one of your competitors, key suppliers or customers. These organisations are critical to your business sustainability, yet you have no control over their risk management practices. By understanding the impact of market shock on their organisation as well as your own, you are better placed to implement strategies to mitigate any loss or benefit from any potentially upside.

Whilst this note refers specifically to the recent downturn in global markets, organisations regularly experience localised events which can impact their business. Examples of these could be – changes to key employees, proposed legislative changes, new technology or an industrial incident in a similar business locally or overseas.

Developing and maintaining a robust risk management plan which has a significant focus on external events that is supported by a comprehensive review and reporting regime can greatly assist your businesses sustainability.