10 minute read
South Africa RIG
Zanele Makhubu, CMIRM, Chair, Director Enterprise Risk Management and Business Continuity in Public Sector
The impact of Covid–19 has exposed the level of poverty and inequality in the society and communities. The poor were the most vulnerable as they could not cope with the restrictions due to lockdown. It had impacted their low income to the extent that their basic needs like food, basic hygiene and other necessities quickly ran out and replenishing was difficult. The Covid death rate and number of infected have increased daily with the level of exposure while containment measures are implemented. Supply chain risks increased due to Covid–19 disruption - lack of proper protective equipment and required basic hygiene consumables across the globe were in high demand. This had a ripple effect on containing the spread and attending to the people who needed the assistance the most. The virus has affected the economy and business so badly and its impact is continuing to hit hard as other businesses are closing down. Many people have had their salary cut and lost their jobs, because employers and business were closed especially those who are not providing essential goods and services. The unemployment rate has increased drastically. The three to six months impact will be huge as there is no telling when the virus will be fully contained. As the country goes into the winter season, there is a fear that it will peak during this time as the level of exposure will increase and more cases will be recorded. Extreme caution is required
It’s difficult to compare South Africa to other countries as the virus has no favouritism. The impact is the same as the virus is deadly and affects people’s livelihoods. The main concern is to save lives and the virus has taught us to invest in disaster management and disaster risk reduction strategies. Lesson learned is that it is a global phenomenon which needs coordinated efforts and resilience strategies that are well thought of. More awareness and training in the communities is needed and rehabilitation and reconstruction strategies should bring new economic development post-disaster that are sustainable.
Our country has a strong disaster management policy and framework, although at the beginning we did not anticipate that the virus would spread so fast globally. The President and his cabinet on realising the seriousness quickly assumed leadership and declared the state of disaster to contain the spread by closing all the borders and grounding the airlines, at the same time instituted the state of emergency by declaring the lockdown with stringent restrictions The consideration for operations was that the companies and government departments that offer essential services were allowed to continue to provide service especial in the health and social sectors. It is critical for risk managers to also equip themselves with skills in the area of disaster management and business continuity management. The outbreak has made risk assessment a prominent skill and most sought after in assisting in mitigating the virus. In our country risk managers are called to lead in advising business and government in terms of risk assessment and business continuity management. Business continuity steering committees chaired by Chief Risk Officers are directing operations and continuity of business to resume operations gradually in line with a risk assessment of the level of exposure. As and when there is a peak /decline in the virus the risk-adjusted strategy is implemented. This has elated the importance of risk management and recognition of its value-add in prevention and proactive strategies. Being a professional trained in ERM gives confidence and trust in the advice that you provide to your organisation. It also advocate for the risk profession to be taken seriously in the organisation.
Linda Conrad, Global Ambassador, Stone Harbor Consulting (NOT Exelon Corp.)
It is important to be realistic yet optimistic regarding the impact of this Covid crisis. From a resiliency perspective, this Covid emergency and “shelter-in-place” has been a true test of preparedness for governments, businesses, and for individuals. Leadership everywhere is challenged with leading responsibly, using science and facts, as well as empathy, to drive decision-making while focusing on the needs of key stakeholders. Organizations with strong risk management and scenario planning are able to transition to new business processes, while those without disaster recovery plans are creating work-arounds on the fly. Everyone is making good use of the collaboration technology to keep working and stay connected. All schools are closed, and those that are more agile have moved to on-line learning, while others are emailing assignments. At times the network infrastructure becomes overloaded, but it has been holding up well and enabling companies to transact business. Naturally, the main concern is personal safety. However, the world is seeing the economic fallout from Covid–19. Many service-based businesses are depleting cash reserves and individuals are going through their savings like a hot knife through butter. Small businesses and their owners, in particular, are feeling the weight of the shut down and scores have already begun the process of filing for bankruptcy. Unfortunately, it may take a long time to recover from the economic impact, particularly in certain places like Italy and New York City which have been disproportionately decimated from a human and financial perspective. During these unprecedented times, the world has seen a surge in cyber crime. Companies everywhere have been focused on managing the financial and operational impacts of Covid–19, and cyber criminals are sweeping in. In response, the Cyber Association of Maryland Inc (CAMI) have quickly taken action. Last week, CAMI stood up a Cyber SWAT team and the State of MD has officially endorsed it. On Maryland’s website, there is now a link to CAMI’s website, where a company can contact the SWAT team requesting help. This innovative response, aimed at supporting local businesses in their cyber resiliency, is but one proofpoint of the extraordinary collaboration and public / private partnerships which are occuring everywhere. Other examples of collaboration for the greater good include the many manufacturing and drug firms who are refocusing their efforts toward solving the current crisis by producing essentials like ventilators, hand sanitizer, antibody tests and vaccines. This massive coordination effort, orchestrated by the federal and state governments in partnership with key corporations and not-for-profit agencies, indicates corporate and societal agility. There is a marked increase in resourcefulness, as supply chains have instantly reinvented and redirected their production and distribution channels, and found new ways to collaborate with unlikely partners who are now all pulling in the same direction. As a case in point, one large company is commissioning small businesses who are out of work to make vats of sanitizer for redistribution. It has been a positive thing to see the increased innovation and creative connections that are now occuring. Interesting to note that Isaac Newton did some of his best thinking after being sent home from his studies in Cambridge to avoid the plague, and was quarantined at his parents’ house. The year that he spent away was later referred to as his ‘annus mirabilis’ or “year of wonders.’ He worked on mathematical problems he began at Cambridge, and the papers he wrote at home became early calculus. Next, he acquired some prisms and experimented with them in his bedroom, even boring a hole in his shutters so only a small beam could come through, from which sprang his theories on optics. And finally, right outside his home bedroom window, there was an apple tree - yes, that apple tree - where Newton reportedly sat, was hit on the head by an apple, then better understood theories of gravity and motion.
There has been an incredible outpouring of compassion from individuals, who are giving their time and resources to help others by delivering food to elderly, tutoring children remotely, sewing masks, and showing support for first responders and medical professionals. Charitable and religious organizations have stepped up by offering care packages and opening their spaces to be used by the public, even though their own fiscal situations have drastically deteriorated. It would be ideal if society can take advantage of this global crisis to learn from the dire social needs that are being laid bare and crystallized by this pandemic in both advanced and emerging economies. Many people are trying to be kinder to each other, being resourceful, and trying to keep a sense of humor, acknowledging that we are all being impacted together. The Corona crisis may mark a turning point for the visibility of the risk management profession, as boards, investors and governments re-evaluate business resilience and the enhanced value of risk management. Business continuity and IT disaster recovery plans will be viewed as a critical component of corporate strategy and operational readiness should be more prominent in fiscal prioritization and ripe for additional investment. Studies done by the National Institute of Standards and Technology (NIST) and University of Maryland show that firms with robust IT recovery plans are significantly less likely to be negatively impacted by disruptions due to the additional proactive cyber hygiene put in place in advance. Risk managers can play an integral role in partnering with operations, supply and Executives in scenario planning and modeling options for response and recovery. As a result of Covid, we might anticipate an increase in interest in professions involving Risk Management and business resilience, particularly in the realm of IT and data analytics. As an example, the following positive comment was made during a recent enterprise risk heat map review: “It is quite apparent where credentialed experience and subject matter expertise exists.” Risk Management professionals can be increasingly essential as the world learns lessons from recent experiences on how to better protect society by preparing for risks, responding to emerging issues, and building resiliency. In many ways, Covid–19 has brought out the best in people and companies by restoring a sense of common humanity, and it is heartening to see this global resiliency of the human spirit. The earth is also benefiting from reduced pollution as we all stay home and the world takes a collective deep breath. As we begin to emerge at the other side of this crisis, there is hope that individuals, corporations and governments will take this opportunity to re-evaluate how they spend their time, energy and resources, to establish a “new-andimproved” normal.
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