Auspicious Date Promotes Risk Planning

At 12:12 on 12/12/12, many people in the Greenwich Meantime zone stopped what they were doing to pray for the planet and world peace, as the date is the last such once-in-a-lifetime occurrence this century.

There will be mass weddings, doomsday prophets and spiritual healers both celebrating and fearing the moment in time zones all over the world but what the date will mean for the rather more earth-based management accountant is that planning for the future must be at the forefront of his or her mind.

Going back to the Cassandras, they have a point – the world today is unstable politically, economically and environmentally and it is up to the management accounts in any business to formulate a plan that takes into account these external risks and minimise their impact on the bottom line and well-being of employees.

As far as political risk is concerned, a business should consider what critical assets, such as people or reputation it might be exposing if working in a potentially unstable area of the world.

While environmentally, more and more firms now realise that natural threats, such as severe flooding, snow and other extreme weather events can have a massively detrimental effect on their business and this does not even take into account natural disasters in parts of the world that might supply goods and services or to which they might export.

Finally, global economic turbulence should be a major consideration when planning a strategy that mitigates external risks. The current climate in Europe alone is extremely volatile and has led to reduced credit, currency fluctuations and jittery markets, all of which lead to uncertainty, which, in turn, calls for serious strategic planning

Posted in Blog, Business Technology.