Contingency and Business Continuity Management

Without a business continuity plan, a company cannot survive

• Most companies now operate in a more connected business climate
• This connectivity exacerbates the negative impact of a prolonged business interruption on
every other part of the business as well

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• BCM is a subset or ERM

• ERM strategies are formulated before an event, or risk, occurs
• Most BCM strategies and tactics focus on the processes that occur after an event, or
disaster, occurs
o The objectives of those processes are to restore the business to normal
operations as efficiently and effectively as possible
• BCM plans must be reasonably designed to enable the organization to meet its existing
obligations to customers, and address the existing relationships with other broker-
dealers
o Such plans must be updated whenever there is a material change in a firm’s
operation, structure, business, or location that affects the information set forth
in the BCP
A sound BCM plan defines the roles and responsibilities of all corporate functions and of
senior leadership so that none of these concerns should get in an organisation’s way

• Having a sound finance team is the 1st step

CMA Management guideline

• To give guidance on the most effective and cost efficient investments businesses can
make to improve their BCM capabilities
• Defines BCM as a corporate capability
• Recognize that BCM planning efforts require a cross-company perspective and can’t
be owned by solely the IT department, unlike the past

Ensuring compliance with BCM guidelines

• Accountability (assigning responsibilities)
• Documentation (proper monitoring and review)
• Incentives and rewards (giving due recognition)
• Having a proper ‘tone from the top’
 • External oversight

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Benefits to Companies
• BCM can differentiate the company’s service-delivery or product-delivery resilience
to potential customers
• Business inefficiencies can be exposed through thorough business impact analyses as
well as ongoing business continuity monitoring
• Retaining customers following a disaster is less expensive than acquiring new
customers
• Successful crisis management experiences can boost morale among the workforce and
help prevent employee turnover following a disaster

Stumbling blocks
• BCM commitment is difficult to sustain over time due to several obstacles that prevent
companies from installing, maintaining, monitoring and upgrading business continuity
capabilities
o Vividness bias
o Competing priorities
 Looking at more immediate and visible demands – quarterly financial
performance targets, production quotas and quality objectives
o Lack of standards
 Relatively new disciplines

Incidence
• Response within business processes
• Managing within existing capabilities
Crisis
• External
• Industry wide (natural disasters)

• BCM addresses ‘denial of service / facility’ rather than focus on individual threats
• Clearly identify your own vulnerabilities
• Clarify who and what you depend on (suppliers & customers)
• Involve major stakeholders in the assessment and planning activities
• Clarify the information needs of all stakeholders and prepare a communications plan
to support this before, during and after a significant event
• Preparation and adoption of BCM is part of corporate governance and must be
given appropriate commitment, resource and prominence