Business fear on the increase
This is according to a survey of UK corporate fears by Grant Thornton's Forensic and Investigations Services' practice
These fears are unsurprisingly matched by a strong fear of terrorist attacks and war, but, more surprisingly, by little or no fear of major regulatory changes. 30% of businesses lack any contingency plans whilst almost half (48%) are not insured against the risks they identified as potentially most damaging. The survey also found a 46% increase in corporate fears compared to this time last year.
Commenting on the survey, Patrick Storey, head of Grant Thornton's Financial Markets Group, said: “The results show that a large proportion of UK corporate fears revolve around IT failure and fraud and theft; with the current political instability weighing heavily on the minds of UK management. Quite worryingly, a number of risks which we regularly see having a considerable and sometimes devastating impact on businesses, were completely overlooked, such as civil/criminal charges against company directors, disputes between shareholders, and particularly, major regulatory changes. For example, whilst firms and institutions regulated by the Financial Services Authority are now forced to work to identify business risk and implement contingency plans many are still not recognising and acting upon these risks.”
UK businesses still have some way to go to protect themselves from unexpected risk. Whilst 90% claim to have a disaster recovery plan in place, over 30% don't have a contingency plan to deal with those fears that they highlighted as potentially most damaging to their livelihoods.
Patrick Storey commented, “This may suggest that either their disaster recovery plans are incomplete, out of date, or that company directors are not giving the necessary attention to risk planning and equating 'unexpected' to 'unlikely'. This is a dangerous strategy which could backfire at any time.”