Board members aware of crisis situations but half of them have no plan for themStaff writer ▼ | February 25, 2016
Board members around the world have confidence in their organizations' ability to deal with crisis situations (76%), but are less confident that they, and their organizations, are prepared for them.
A crisis of confidence Disparity between feeling ready vs. being ready
Disparity between feeling ready vs. being ready: More than three-quarters of board members (76 percent) believe their companies would respond effectively if a crisis struck tomorrow.
However, only 49 percent of board members say their companies engage in monitoring or internal communications designed to detect trouble ahead, and only 49 percent say their companies have playbooks for likely crisis scenarios. Even fewer, (32 percent) say their companies engage in crisis simulations or training.
Damage to corporate reputation ranked top area of vulnerability, followed closely by cyber-crime: Survey participants said the crisis areas that make them feel the most vulnerable are corporate reputation (73 percent) and cyber-crime (70 percent).
Two-thirds (66 percent) named supply chain issues, regulatory action, and natural disasters as vulnerabilities as well.
When asked about specific crisis areas, board members were more likely to acknowledge their vulnerability, than they were to say they had a plan to address it. For example, 73 percent named reputation as a vulnerability, but only 39 percent said they had a plan for it.
Board members aren't engaging with management: Fewer than half (49 percent) say they have engaged with management to understand what has been done to support crisis preparedness.
Only half say board members and management have specific discussions about crisis prevention.
No quick fixes: Fewer than one-third (30 percent) of board members whose organizations had been hit by crises said their reputations recovered in less than a year. Sixteen percent said it took four years or more. Financial and operational crises had similar long recovery times. ■