Business Continuity as a Fiduciary Responsibility
A fiduciary duty is a relationship of trustbetween two or more parties. The continuity of the business structure is encompassed within that duty. This trust rests on the business’s ability to bring reliable results in a systematic manner. When disasters occur from operational risk the instability can easily undermine the trust relationship in place and erode confidence in the service provider.
Every business leader has a responsibility to pursue continuity management and ensure it is given space and respect within their business. Leading an organization requires integrity and trustworthiness which is demonstrated by the steady continuity of the organization.
It is the responsibility of senior management that the company identifies, prioritizes, manages and controls risks as a part of the strategic planning process. As a part of its support for continuity planning, appointing knowledgeable people and allocating sufficient financial resources for implementing the plan are the two most critical advantages. The emphasis is on planning for the worst and committing to the development of a responsible plan to minimise the impact of harmful or unlikely events. It is also the fiduciary duty
of the management to provide reasonable complete disclosure of the actual state of the company to its shareholders.
Discovering potential improvements that can be made to the current business systems and ways of reducing the business costs is basic for devising a good business plan. It is an accepted fact that all risks cannot be fully avoided and a company may need to accept partial residual risks. Business continuity planning is the tool that is used to manage these residual risks. A good robust plan will help a company to continue its operations — even in case of a disaster.
It would not be sufficient to implement a generic business continuity plan. For the plan to be effective, it must be customized to specific risks and catastrophic scenarios like major building loss or local system failure. The necessary steps to recover from natural or man-made disasters must be understood and planned, and eventually tested for effectiveness. A look into the unforeseen future may result in improvements in the operational efficiencies in the present. The business continuity plan must be reviewed and updated at least annually depending on the changes in the organizational structure, business operations and resource requirements. The company should also create business continuity
and disaster recovery teams to create general awareness and to provide training to all the staff members. A proper plan will help in significantly reducing losses, if
the company is hit by disaster.
A business continuity plan can help protect a company’s image, brand and reputation. Being known as a reliable company is always good for business. Warren Buffet said, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently." Doing things differently means deliberately managing your ability to deliver. Business continuity planning demonstrates there are good practices in place within your organization. To find out more about how you can drive healthy continuity in your organization give us a call at 888-297-7526.