FOCUS
Be prepared
Mike Jay examines neglect of security risks through the prism of the FPA’s new security handbook publication
know of? Surely that must be the fi nancial crisis of 2007. I say ‘neglect’ of risk rather than miscalculation, since we are led to believe that those in a position to manage the risks leading to the crisis simply didn’t recognise that credible risk existed or, if they did, they didn’t have the slightest idea how to assess it. The risking of billions on ‘credit default
W
swaps’ and ‘collateralised debt obligations’ by fi nancial businesses was surely a textbook example of ‘it won’t happen to us’. In that sense, the losses were self inflicted, but when risk is posed by malevolent outsiders, there is even more reason to be sure that risk has been recognised and assessed. An irony is that, in contrast to the management of those large financial institutions that happily piled on risk exposure between 2000 and 2007, it is modest operations like the local post offi ce where you will find the most security risk aware staff and managers.
50 MARCH 2018
www.frmjournal.com
HAT HAS been the single most damaging and far reaching neglect of business risk that we
Even in a sleepy village where ‘we never
need to lock our doors’, the chances are that the post office will have had at least one terrifying raid, and there are many other examples of targets regarded as ‘soft’ or highly remunerative where risk awareness is found in abundance. Such custodians probably find a culture of ‘it will probably never happen’ unbelievably complacent.
Not just theft
Security risks are not only about theft. There are, of course, plenty of other ways, most obviously wanton destruction and arson, in which a business can be damaged by criminal acts. When Reckitt and Benckiser, makers of
Dettol and Air Wick, suffered a ransomware attack in June last year, the disruption to their manufacturing and distribution meant that they would ‘lose revenue permanently’. The company was obliged to publish profit warnings and, at the time of writing, its shares have not recovered. So neglect of security risk appraisal and management can have expensive
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