Business continuity

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Corporate Risk Management

Module Leader:

Course work Assignment

Don’t plan for a bomb or a hurricane, but look at whether you can operate with a reduced staff, disruption to the office or the loss of a key supplier

Words: 1945

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Terrorism and hurricane belong to hazard risk category. They are unforeseen events that arise outside thenormal operating environment of the organisation and are often thought of as insurable risk. According to their frequency and severity there are low and high.

Eleanor Hughers a spokesperson of Financial Service Authority in UK considers that the establishment of a plan in order to avoid or prevent hazard risk in not necessary. Evidence of this argument is provided by the fact that operational riskssuch as staff absence, disruption to the office or the loss of a key supplier have better chances to occur. Moreover, consequences might represent a huge issue for a company.

In order to be able to overcome this kind of issues, it is appropriate for an organisation to adopt a Business Continuity Management (BCM). This one is based on the principle that an organisation has the responsibilityto ensure the continuation of its business operations at all times (Chattered Management Institute, 2009). A survey of National Risk Register in 2008 has identified risks which are of particular concern to managers. Human disease such as pandemic influenza (57 per cent) is one of those (Chattered Management Institute, 2009). As a result it can lead to a consequent staff absent inside anorganisation.

In order to deliver an efficient BCM in a bank, facing some difficulties of reduced staff, it is required to be pragmatic. This method consists in a first time to develop a plan based on observation and theories. Then, the procedure will be tested in a real situation. At last, from this evaluation it will be possible to bring out elements which have to be changed in order to integrate moreefficiently the BCM into the organisation.

Developing plan

Understand the organisation and the risk facing.

The establishment of a BCM plan in the environment of a bank necessitates some previous studies concerning the understanding of the organisation and more specifically the staff. This one is likely to be absent from work for a combination of reasons: Personal illness, the need tolook after family members who are sick, bereavement, fear of infection, the impact of a public health measures like school closures and other factors such as transport difficulties (Financial Sector Continuity, 2009). Staff shortages represent a risk which copes with a high frequency and medium severity, because the loss coming from this risk would be at least serious. The risk can be classifiedas a non financial one because it cannot be measured in monetary terms. It is also a pure risk, nothing has been speculated. It happens without any control, it is not someone’s mistake, so it is classified as fundamental and of course it cannot be reduced through pooling. Staff reduced can be identified as an interruption risk because it could affect the activity by stopping it or slowing it downand it involves time to be replaced.

The bank needs to anticipate and estimate the level of absence and its potential impact on its own activities when the difficulties would occur. The actual consequences will depend to some extent on the composition of the workforce and the contact with external partners, such as clients (The National Framework, 2005). In fact, the demography of a bank staffis divers according to sex and age. This might represent a high risk of absence for several staff members due to child and family care or simple illness. Furthermore, most of the employees in a bank have direct contact with clients; as a result transmission of diseases could be easily made at these occasions. It is not possible to avoid directly that risk still; the bank could try to reduce the...