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The 2 P's of Disaster Planning: When You Can't Prevent, You Must Prepare
Frank Rudewicz September 17, 2007 — 1,185 views
Corporations are continually reassessing their incident response preparedness for the purpose of mitigating risks and improving protection of their employees, visitors, customers, assets and facilities. Thus, it is imperative that every company, no matter what size, have in place a plan to respond to a corporate disaster. A corporate disaster is any event which threatens the continued viability of a company. It can result in death or significant injuries to employees, customers or the public; shut down your business, disrupt operations; cause physical or environmental damage; or threaten the facility's financial standings or public image.
U.S. enterprises, business leaders, and accounting professionals must be concerned about the following critical risks:
1. Employee theft and fraud cost U.S. businesses $120 billion annually and is a contributing factor in 30% of all business failures.
2. Natural disasters such as earthquakes, hurricanes, tornadoes along with other fire disaster threaten businesses everywhere; while 44% of businesses that lose records in a disaster never resume business; yet the majority of businesses spend less than 3% of their total budget on disaster recovery planning and many do not have an emergency recovery plan.
3. Workplace violence has become an American epidemic since the early 1990's with OSHA now reporting homicide as the second leading cause of fatalities with nearly 1,000 workers murdered and 1.5 million workplace assaults annually.
4. Intellectual property loss and related cyber crimes costs U.S. businesses well over $100 billion annually according to the White House Office of Science and Technology; and 93% of companies that experience a significant data loss are out of business within five years.
Consequently, business and finance leaders should ask three interrelated questions within their organizations:
1. Do the systems and programs that may have served us well in the past, continue to serve the heightened and complex needs of today?
2. Does our organization have written emergency procedures and protocols in place to appropriately respond to a critical incident or the threat of one?
3. If so, when was the last time that these programs were audited, tested or drilled and then updated based upon the results?
Please visit CPA-Resource.com again next week for tips on a successful crisis response and planning techniques!
Frank E. Rudewicz serves as Principal and Counsel of Marcum LLP and heads the Forensic, Investigative and Valuation Advisory practice for the New England area. He has more than 26 years experience conducting domestic and international investigations for anti-trust/anti-competitive issues, harassment, fraud, ethics and other employment related conduct.