Events, dear boy, events...

Events, dear boy, events…this is a quote often attributed to former British Prime Minister, Harold Macmillan and one that will be ringing in the ears of many business and risk professionals as they watched turbulence unfold in the markets yesterday. Many will now be waking up, asking themselves what does the coronavirus and this market turmoil mean for them.

Up until yesterday; the coronavirus crisis had grown relatively quickly but steadily. After a history of SARS, Swine Flu and the like, many firms would have, at least a semblance of, a response plan which could be used as a basis for a coronavirus response plan.

However, I wonder how many of these plans consider the implications on the firm’s business model, ability to deliver operationally and strategically, on their balance sheet, P&L etc. I wonder further how many firms have thought the scenario where; in the face of a potential global pandemic, the world experiences an oil price shock leading to a dramatic drop in the value of listed companies worldwide and creating significant, additional uncertainty going forward.

Events, dear boy, events…this reflects the times we live in and underlines why firms need to build risk-based management systems, embed risk-based decision-making within their culture and put in place the technology and data architecture to enable firms to execute operationally and strategically in these times of significant uncertainty.