In today’s information-packed and vulnerability-prone world, there is no shortage of risks that threaten companies. Corporate security and risk management relates to strategies utilised by security professionals in order to avoid situations that pose threats by identifying, assessing, and controlling them. Therefore, for any company to function properly, corporate security and risk management must be at the forefront of its operations.
We can also refer to these types of strategies as intelligent handling of uncertainties. Worryingly, most companies are experiencing an escalation of physical and cyber threats. One study shows that physical security concerns are prompting 40% of organisations to adjust their security strategies.
According to the Bureau of Statistics, Australians saw a 23% decrease in unlawful entry with intent or other theft. This could sound reassuring to corporate Australia ― until we notice that the decline in illegal activity coincides with COVID-19 lockdowns. In fact, crime is not decreasing in scale lastingly but only due to sudden events such as the ongoing public health crisis.
The current pandemic has considerably impacted how we view corporate security and risk management. For one, some organisations now spend more on physical security as it relates to personal health. These expenditures include gloves, sanitisers, masks, and testing, to mention a few.
Furthermore, other companies had to reduce their physical security headcount as a result of the pandemic’s economic impact. Due to this problematic fact, the Ontic Center for Protective Intelligence states that as many as 32% of organisations worry about threats to the physical security of their company leaderships and C-suite members.
As a matter of fact, the Ontic Center’s survey found that many fear physical security breaches hindering business continuity. And we agree that no organisation should understate the importance of proper corporate security and risk management services.
Which Firms Need Corporate Security?
If a company possesses property, assets, and employees, then it requires corporate security services. Fending off criminal acts against any of the three is essential when considering business prosperity. Besides physically protecting the CEO and managers, corporate security also deals with protecting technologies and customer data from fraudsters.
Although there is no one-size-fits-all solution for every company, some similarities could lead us to specific answers.
The year 2020 and the years preceding it presented multiple trends that complicated the competitive landscape, including:
- Increased focus on responsible and sustainable business,
- Heightened geopolitical tension,
- Faster technological change, and
- Radical shifts in consumer buying expectations and behaviour.
COVID-19 proved to be an accelerant of those developments. Expectedly, this distress pertains to corporate security and risk management. In other words, now it is as unclear as ever who is transmitting the virus and whether individuals pose threats to CEOs and managers at corporate-level meetings. Thus, assessing the risks has become extremely difficult, and corporate-style events are suffering the consequences.
On a different note, organisations worldwide lose approximately 5% of annual revenues to fraud. Unsurprisingly, most of it traces back to a lack of corporate security and risk management.
Therefore, the short yet practical answer to the question of whether companies of all sizes need corporate security is this: Yes, and it’s overdue!
The Essential Quality of Risk Management
Risk management has gained plenty of traction in the past two decades, not the least because of accidents such as the Deepwater Horizon explosion. Since the event, experts have used this incident to accentuate how risk management can go wrong and fast.
Closer to home, the Esso Longford gas explosion killed two workers and injured eight. The event devastated Victoria, causing a halt to primary gas supply chains, with around AUD 1,3 billion lost in the process. In the aftermath, a Royal Commission blamed the accident on Esso Longford, the company in charge.
As many experts believe, all this could have been prevented if risks were managed better.
Despite all of the money and rhetoric around risk management, executives and managers often treat it as a compliance issue. They claim that creating a multitude of rules and having employees follow them will inevitably increase productivity and safety. Truth be told, some risk requires alternative approaches, not a rules-based model.
Types of Risk
Generally, three types of risk generate the most significant problems in corporate Australia ― and really anywhere else in the world.
Preventable risks are those that a company can either control, eliminate or avoid. These include risks from unauthorised, unethical, illegal, inappropriate or incorrect actions by managers or employees. Companies can counter this type of risk by guiding people’s behaviours and decisions toward desired norms and monitoring operational processes.
External risks are those found outside the organisation and are beyond its control or influence. These risks include political and natural disasters, as well as major macroeconomic shifts. In this case, managing risk efforts should focus on identifying and mitigating their impact rather than trying to prevent it.
Strategy risks are those that a company voluntarily accepts to generate extensive returns from its strategy. For most companies, this means taking on risks through research and development activities. Unlike preventable risks, strategy risks aren’t inherently undesirable. For example, to capture the potential gains, the oil and gas company BP accepted the high risks of drilling below the surface of the Gulf of Mexico.
For strategy risks, the traditional rules-based control model is ineffective. Events such as this necessitate a system to reduce the probability of risks materialising and enhance the company’s ability to contain or manage the risk events.
People in all positions of power tend to overestimate their ability to influence events that are profoundly determined by chance. Similarly, no matter their rank, everybody feels confident about the accuracy of their risk assessment and forecasts.
Interestingly, organisational biases also hinder our ability to discuss failure and risk. In fact, the biggest problems arise when teams engage in groupthink. As soon as a course of action gathers support within a group, those not yet in agreement with the majority tend to fall in line. This proves to have crippling effects on any company.
For these and many other reasons, corporate security and risk management services must not be observed as a compliance function but a real-world human-centric issue.
Companies like Panoptic Solutions help organisations enhance productivity by offering unmatched corporate security and risk management services.