An article by Cambridge Risk Solutions, published this week in Continuity Central, looks at whether there is any evidence that firms that follow good practice in business continuity management (BCM) have fared better in the current Covid-19 pandemic. Specifically it looks at the impact on the share prices of companies in the FTSE 100 from mid-February to Mid-April, to see if those that have adopted BCM have suffered less damage to shareholder value.
Sadly the results are inconclusive: there is no association between adoption of BCM good practice and falls in share price at any stage during the 8-week period studied. This could be because the effect is very small and buried in the noise, but the article also considers other possible explanations, including:
- The possibility that good-practice-based plans were abandoned by senior management when faced with a crisis of such magnitude; or
- Good-practice-based plans were implemented but failed to mitigate the impact on businesses.
The answers to both of these questions will be vital in learning lessons from this dreadful crisis and improving the practice of BCM for the future.
You can read the full article here.