New risk management concern

About this time last year, most Filipinos had already made plans on how to spend the holiday season.

Those plans included Christmas parties, family reunions, get-together with friends, mall visits and, depending on the availability of funds, domestic or foreign travel.

Things would be different this time.

No thanks to a bunch of Chinese nationals in Wuhan, China, who thought partaking of bats and wild animals is a gastronomic delight, the Philippines and the rest of the world are suffering from a new coronavirus with provenance that can be traced to those creatures.

And because of COVID-19, some of the pleasures associated with the holiday season cannot be enjoyed.

To contain the spread of the virus, which still has no known vaccine or cure, the government imposed (and continues to do so) quarantine measures in various parts of the country.

The adverse effects of the lockdown put the business sector in a situation it has never been before. The prolonged contraction of business activities resulted in a recession and, in the process, threw millions of Filipinos out of job.

To aggravate matters, thousands of overseas Filipino workers were compelled to come home when their employers shut down operations.

No doubt, COVID-19 caught the risk managers (or corporate strategic planners) of the country’s businesses by surprise.

It was something out of their playbook on the incidents or events they have to look out and prepare for as part of good corporate governance.

For decades, business risks revolved around fortuitous events that are either natural, e.g., earthquakes, typhoons and floods, or man-made, such as strikes, riots and rebellion.

Later, with the advances in technology and the rise in creative mischief by “evil geniu­ses,” business risks included computer breakdown, fraudulent acts by employees, hacking and cyberransom.

In light of these contingencies, risk managers recommen­ded the adoption of preemptive measures to prevent them from happening or contain any damage to the business that may arise if they happen.

Thus, for example, to prevent the commission of fraudulent acts by rogue employees, a company may engage the services of a financial or technology auditors to conduct surprise audits or inspections.

By spreading the word that third parties have been authorized to do random audits, employees who may be inclined to be less than honest in their work may have second thoughts about doing something nasty.

In the event “shit hits the fan” and the company finds itself in the middle of adverse newspaper or social media publicity, effective risk management requires the company immediately issue a statement stating its side on the issue or make its spokesperson available to the media to answer questions.

In this age of social media where, in a manner of speaking, a forest fire is easy to ignite but very hard to extinguish, the failure to issue a statement or keeping quiet on an incident that affects a company’s integrity or reputation is bound to give rise to serious unexpected consequences.

With COVID-19 a painful introductory lesson, risk managers may have to take a second look on the list of natural and human-made risks they have to prepare for to ensure the continued operation and viability of their businesses.

In earlier times, plagues and pestilence were included in the list of fortuitous events traceable to nature. With the advances in medical science, those two incidents disappeared from that list.

According to some reports, with climate change wreaking havoc on the balance of nature and humans invading the sanctuaries of wild animals, infectious diseases similar to, or even worse than, COVID-19 may hit the world.

In fact, recently, medical experts have warned about the spread of an infectious bacteria called “brucellosis” that is transmitted to people who eat raw or unpasteurized dairy products, or by direct contact with infected animals.

Without sounding alarmist, this early, risk managers may have to start figuring out contingency plans in case (knock on wood) no effective vaccine or cure is found for COVID-19, or the virus replicates itself in another form in the future. INQ

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