The overwhelming majority of Australian companies — including financial planning businesses — do not have a plan in place to deal with major disruptions to their operations, a new survey released at the CPA Congress shows.
According to the Macquarie University study, 91 per cent of Australian companies have no plans to deal with a disruption, yet 50 per cent have experienced major disturbances to their business.
Of those that have experienced a disruption, two out of five never reopened and of the remaining three, one went out of business within two years.
AON Risk Services principal Rob Cusack said there is an increasing incidence of dangers to business, including natural disasters and even terrorism. This is why companies should have a business contingency plan (BCP) in place.
“A BCP is a risk based framework providing a process to deal with operational risk by developing policies for the minimisation of any impact and the recovery of critical business activities,” he said.
“Businesses need to recognise the need and do something about it.”
Cusack said companies often say they don’t have a contingency plan because they don’t have the resources to create one.
“There is also a belief disaster will never happen,” he said.
But Cusack said there are moves overseas to make a BCP mandatory, with the insurance industry putting pressure on regulatory authorities in the UK.
“The time for action on a BCP is now,” he said.
