Corporate Crisis and Enterprise Risk Management:
An Integrated Approach
If one thing is true about the corporate world, it's this: a crisis can strike at any moment. This could be a financial downturn, operational failure, reputational scandal, or any other form of "corporate crisis". Enterprises, fortunately, can significantly reduce the impact of these crises by implementing robust Enterprise Risk Management (ERM) strategies. The integration of corporate crisis management and ERM leads to better decision-making and resilience. The magnitude of Corporate Crises - According to the PR News/Crisp survey of 2019, over 53% of respondents had experienced a crisis in the past year, implying that odds of encountering a predicament are more frequently than generally assumed.1 The Relationship between Corporate Crisis and ERM - As pointed out by the Association for Federal Enterprise Risk Management, ERM provides a strategic, high-level approach for identifying, analyzing, and responding to risks that could disrupt your business, such as a corporate crisis.2 Crisis Management and ERM: An Integrated Approach
Risk Assessment: Establish a regular process for evaluating probable crises and determine their potential impact on your organisation. This allows for quick decision-making and strategic action when a crisis hits.
Crisis Communication: Communication plays a significant role in managing a crisis. An effective strategy coordinates messaging across all levels of the business, ensuring everyone is informed and equipped to handle the crisis.
Contingency Planning: Deciding in advance how to manage a crisis is crucial. Contingency plans should be thorough, tested, and updated regularly to ensure they provide practical and effective mechanisms for crisis management.
Crisis Resolution: Learning from a crisis can help prevent similar occurrences in the future. Implementation of crisis resolution strategies is instrumental in restoring normalcy and trust in the organization.
As Michael Rasmussen, the GRC pundit, eloquently stated, "ERM is about reducing individual and shared uncertainty that organizations have as they make strategic decisions."3 It suggests that the integration of corporate crisis management and ERM isn't just an option, but a necessity.