Lloyd’s chairman Lord Levene has urged business leaders to put risk management at the heart of their corporate agenda.
In a speech to US business leaders in San Francisco, Levene outlined the risks facing global businesses, including interruption costs, corporate fraud and an increase in liability claims.
At a time when America is still managing the impact of major corporate collapses and terrorist attacks, it is crucial that business leaders understand that business has entered a new era of risk, warned Levene.
He called for businesses to raise risk awareness to the boardroom, and the respond actively to the changing risk environment, including risks associated with business interruption and intellectual property.
“Looking ahead ten years, I firmly believe that the most successful, least crisis-prone businesses will be those whose boards have shown firm resolve and taken decisive action,” Levene said.
“Effective, integrated strategies for dealing with tomorrow’s risks require a change in culture at board level now.
The Lloyd’s chairman pointed to recent research which said companies that could not resume business within five days of being hit by an emergency would go out of business.
Levene warned that with increased globalisation and a global economy, the impact of an emergency could spread like a tidal wave around the global business community.
He also noted that recent studies of US businesses found that 40% of companies hit by a disaster will go under within five years, but that more than half of US corporations do not have crisis management plans in place.
Levene also encouraged business leaders to broaden their focus to prepare for risks associated with an increasingly global and technologically advanced economy.
He said it was important for businesses to ensure their intangible assets, including intellectual property and corporate reputation, are protected.
