How can businesses be equipped for ‘black swan’ events?

In risk management, we often come across the term “black swan”. A black swan is an unforeseen occurrence that goes beyond what is often anticipated in a situation and might have very negative impacts. The likelihood of the event occurring might be very low, but the impact is very high, or even catastrophic. Basically, it is an outlier that carries an extreme impact. Of late, ‘black swan’ has become a generally accepted term to describe low probability, high-impact events.

Some of the examples of black swans in the past are the Dotcom crash, the 1997 Asian financial crisis, Brexit, the 9/11 attacks, the 2008 global financial crisis and the Fukushima accident. The most recent addition to the list is the COVID pandemic though some might debate that such worldwide pandemics were in existence since a long time.

The following strategies are some that businesses could employ to prepare for black swan events.

• Crisis Management Plan (CMP) – Organizations need to have a Crisis Management Plan (CMP) which outlines how to respond to a critical situation that would negatively affect an organization’s profitability, reputation, or ability to operate. Responsibilities for addressing the press or public, and communicating with vendors, employees etc. are some of the important topics that should be covered in a CMP.
• Business Continuity Plan (BCP) – A business continuity plan (BCP) is a document that contains the vital details a business requires to keep running in the case of an unanticipated occurrence. The BCP outlines the fundamental operations of the business, points out the systems and procedures that must be maintained and provides instructions on how to accomplish that. Basically, all organizations need to start by asking themselves the million-dollar question of ‘What happens to the business if we cannot access our corporate headquarters or place of work?’
• Disaster Recovery Plan (DRP) – A disaster recovery plan (DRP) maps out the process of resuming normal business operations, reconstructing, or salvaging vital and other important records and equipment, and becomes a guide for all employees during and after a disaster.
• Employee Training – It is not enough that organizations formulate a well-defined Crisis Management Plan or Business Continuity Plan or Disaster Recovery Plan. Employees should be trained in various scenarios, and their respective tasks in times of crisis should be clearly communicated.
• Monitoring world events – It is the duty of top management to track trends across the world. This helps in identifying emerging risks and the need to modify the impact and/or probability of already identified risks.

Bottom Line

Risk management is complicated by black swans, particularly given how quickly technology is evolving. However, such revolutionary advancements in cutting-edge technology increase our capacity for analytic forecasting and attempt at black swan event prevention.

Get Free Consultation

Would you like to rate us on Google?      Yes    No

HLB HAMT - Audit, Tax, Accounting and Business Advisory

4.8

Based on 176 reviews

review us on

Varun R Chandra

07:38 25 Apr 21

HLB Hamt is highly recommended! They have the quality of services that would satisfy your needs. I'm glad I found them.

Giuseppe Assi

06:20 31 Jan 21

I HAD A GOOD EXPERIENCE WITH HLB HAMT DUBAI. THEY HAVE A VERY PROFESSIONAL TEAM, GOOD QUALITY OF SERVICES, GOOD VALUE... FOR PRICE.I RECOMMEND THIS COMPANY.read more

Mohamed Sheriff

16:16 28 Jun 20

Experience with HLB Hamt in audit experience is great pleasure. They deploy well qualified accounts team for audits.... And the amount of checking they perform give the management of the company confidence that internal controls are well in place. We are glad to see they have high standard of audit practices.read more

218141 JOSEPH THOMAS

16:20 23 Jun 20

Professionally managed firm with commitment to the engagements taken. My company and its group are assigning our... requirements for last 12 years to HLB and we don’t have any negative remarks on any assignments.read more

PMI

07:14 23 Jun 20

In my opinion, HLB Hamt is one of the best professional firms in UAE after big4. Excellent client service, professional... and competent staff and timely delivery are their strength. Over the years they have developed the infrastructure and skill set to handle multiple verticals ie, audit, tax services, consulting, IT support etc.Wishing HLB Hamt team all the very best.read more

RAVI CHOKSI

08:28 21 Jun 20

Thank you Team HLB hamt...Your internal auditing team put the good amount of time and inputs in helping the... organisation making considerable improvements throughout the organisational working structure and helps in building the better business.Thanks.read more

Maharajan Subramaniam

18:17 06 Jun 20

High-Performing IT Teams, I'm impressed with the knowledge level of their deputed staff, audit procedures, and... checklist adopted. Mr. Vimal especially understand the requirement and provide solution not only technical feasibility and also considered budgeting. We’re confident in their abilities.read more

Mohammed L

08:07 05 Jun 20

We have been working closely with them on payroll services for quite sometime.They provide very professional... services,experts in domain and excellent support. Would recommend them.Cheers.read more

ROY ROSHAN VIVIAN

06:32 04 Jun 20

Very professional team. Vimal has always given us good solution advice for various Software and IT Infra projects. We... are very Extremely satisfied working with him and his team. Wishing them success.read more

Basil Daniells

05:55 03 Jun 20

I have worked with HLB as a partner of Sage for about 2 years, they were dedicated to the success of the partnership... and kept aligned with the business plan that was agreed between our two companies. They are always ready to go the extra mile for a customer and don’t shy away from challenging circumstances. Keep up the good work and wish you all the success in the future.read more

Amar Kashyap

19:28 02 Jun 20

Team of well qualified and organised professionals. Their reports are not based on numbers first they will understand... their client and their business. They are highly recommended and trust worthy.read more

Radz de Jesus

16:03 02 Jun 20

We're glad to have found HLB Hamt to conduct the IT audit and risk assessment for our organization. We have learned a... lot from their team during that first project. And since then, we've continued to be in touch with them. Mr. Vimal especially is very good at presenting technical concepts in simple yet interesting ways that non-IT and business people alike would easily catch. We are very happy with the professionalism and quality of service they provide. They leave their clients nothing short of satisfied. Highly recommended.read more

Next Reviews