Roads to Resilience

Table 8.1 The business enablers and associated resilience action points

People and Culture

• increase risk awareness

• avoid board risk blindness

Business Structure

• develop risk architecture

• plan crisis management

Strategy, Tactics and Operations

• determine risk attitude

• undertake risk assessment

Leadership and Governance

• establish resilience agenda

• ensure risk governance

Understanding the business enablers

The research identified five principles of resilience: exceptional risk radar ; resources and assets that are flexible and diversified; strong relationships and networks ; capability to ensure decisive and rapid response ; and the ability to review and adapt following adverse events. The principles are explained in detail in Section 7, but they do not exist in isolation or emerge without the full support of the board by way of an explicit board mandate. They are built on four critical features or characteristics of an organisation, which this report calls the business enablers: • People and Culture • Business Structure • Strategy, Tactics and Operations • Leadership and Governance These four business enablers can be thought of as the key ‘levers’ that board members can use to build resilience and where they need to provide leadership. It should be stressed that the attitude of the board to resilience and the leadership it provides are pivotal to increasing resilience. This conclusion was also reached by another recent Airmic report, which stated that “it is for the top management of the company, including the board and executive committee, to establish the risk agenda” 1 .

The business enablers are, of course, inter related and mutually supportive. The people and culture enabler underpins the activities to be undertaken and the processes to be managed 2 . It supports the business structure enabler, which also defines the means of communication and ensures that resilient organisations do not have a risk information ‘glass ceiling’ leading to board risk blindness. The people and culture enabler operates through the business structure to deliver the strategy, tactics and operations for the organisation. Finally, leadership and governance is the ultimate business enabler that protects all aspects of the organisation, including reputation. It ensures efficiency and effectiveness of the strategy, tactics and operations , the business structure and the people and culture of the organisation. Effective business enablers provide the foundation for a resilient organisation. These enablers are present to some extent in all organisations, but it is the actions that organisations take to enhance them that achieves increased resilience. Table 8.1 lists the enablers and the main actions that the research showed board members can take to enhance them.

1 Risk Reporting: Review of risk reporting by selected FTSE350 companies and commentary on the relevance and benefits of detailed risk disclosure, Airmic Technical Report 2013 , p36.

2 As recognised by one IHG manager, saying that organisational culture is essential is a cliché; however, it is the responsibility of the board to drive the change in culture from risk being managed by a department, to risk management being embedded throughout the organisation.

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Roads to Resilience: Building dynamic approaches to risk to achieve future success