But what about the shock of a fire, a major natural disaster, or even the loss of an ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2019\/03\/Risk2.jpg\")
important company top executive?\u00a0 Are you or your board prepared to immediately jump into a pre-planned recovery?\u00a0 From experience on more than forty boards over the years, I can state that few have even considered the possibilities.\u00a0 All of us have a phone listing of our employees and associates. But very few have a phone tree for simultaneous contact of larger numbers of people to marshal a recovery from any type of disaster.<\/p>\n
Duties of your board of directors<\/strong><\/p>\n Boards of directors for companies of all sizes should have a person or better yet a committee dedicated to considering the preparations for disaster recovery.\u00a0 Often, we consolidate this task into the audit committee of a board; and often we expand the subject to \u2018risk management\u2019 which includes examination of all forms of risk, from insurance coverage to OSHA compliance and more.<\/p>\n The management and board\u2019s risk register<\/strong><\/p>\n [Email readers, continue here…]\u00a0<\/em><\/span> It is good practice to create a \u201crisk register\u201d listing all the risks to the company you can imagine, who should be contacted first, and recovery steps that are best practices.<\/p>\n The larger the organization, the more the risk<\/strong><\/p>\n When a company is very small and the company\u2019s assets reasonably replaceable with existing or easily borrowed funds, the event is less likely to threaten the existence of the organization.\u00a0 As a company grows in size and complexity, more stakeholders depend upon the wisdom of the CEO and the board to think in advance of these unpleasant things, and to attempt to insulate the company\u2019s dependents from a disaster.<\/p>\n Backing up yourself<\/strong><\/p>\n How about yourself?\u00a0 Have you been open in sharing your knowledge and talent with a backup, or even a potential successor? \u00a0It is prudent and certainly a sign that you take this responsibility personally as a leader among your peers and subordinates.<\/p>\n My past examples of frightening risk events<\/strong><\/p>\n I have three unfortunate examples in my past of founder-CEOs dying suddenly at their prime.\u00a0 The shock to each organization was a threat to the very core in all three instances.\u00a0 Yet as we will discuss in detail in a future insight, in one, the board stepped in immediately to reassure the stakeholders, elect a new CEO from within the board, and reach out to the community with a plan for succession that allowed the business to continue with minimal interruption.\u00a0 In another, the creditors threatened to close the company, and the board was completely unprepared to respond.\u00a0 The contrast was quite a lesson to me \u2013 one that I would never want to repeat as a board member or senior manager.<\/p>\n How to start the planning process<\/strong><\/p>\n What if?\u00a0 How about dedicating at least a half hour of your next executive or board meeting to the subject, and creating a checklist and assignments for covering at least the greatest three risks identified?\u00a0 It is yet another sign of your growth and growing wisdom as a leader.<\/p>\n","protected":false},"excerpt":{"rendered":" Have you ever lost all your data on your smartphone, laptop, company server or desktop PC?\u00a0 If not, it is probably only a matter of time until you do.\u00a0 Those of us who have experienced this heart-stopping event now regularly … Continue reading ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2019\/03\/Risks-300x225.jpg\")
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