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Member, Beacon International Group, Ltd.
LONDON Despite devoting more time to the issues of terrorism and political risk, company boards are failing to implement appropriate risk management policies, according to a report published by Lloyd's of London.
While over half of the 154 respondents to Lloyd's study, "Under Attack: Global business and the threat of political violence", have noted an increase in the amount of time devoted by company boards to the discussion of terrorism and political risk in the last five years, and 60% think it will increase further in the next five years, nearly a quarter of companies do not even have a business continuity plan.
A further 14% said that their plan is insufficient in the light of current political violence.
The report also contends that, "existing plans may not go far enough." The study found that 20% of companies and 31% of larger companies surveyed cover a chemical, biological, nuclear or radiological attack in their business continuity plans.
"In the last five years, in both France and the United Kingdom, plots to engage in widespread ricin poisoning have been foiled by police. Prudence, not alarmism, should encourage closer consideration of the risk of such attacks, especially where the technology for them exists, as in the case of dirty bombs," said the report.
Lord Peter Levene, chairman of Lloyd's, warned that terrorism is a very specific issue. "If you get it wrong, it can cost a lot of money. But there are simple solutions. The impact on business is not recognized so often or so well understood, " he said.
The report warns that there seems to be a gap between risk awareness and an actual understanding of key threats.