RIYADH, 13 April 2007 — Small and medium enterprises (SMEs) in the Kingdom are highly vulnerable to disaster and other emergency situations, while North American companies are better prepared to handle such situations, a recent survey has shown.
In a study sponsored by KPMG International, a Saudi company, and conducted by the “Economist Intelligence Unit” of Britain, a copy of which was made available to Arab News, it said the level of preparedness varies significantly from region to region. The report found that US companies were more likely than those from Asia Pacific or Europe to deal with specific threats, such as terrorism, extreme weather events and avian flu.
The survey covered the preparedness of companies to face disaster in various regions of the world, noting that preparation is becoming an increasingly important aspect of risk management.
The survey, which covered a sample of 225 risk managers worldwide, said power outage is a major source of concern faced by companies in all areas covered by the study. It emphasized that small- and medium-size firms are the most vulnerable when it comes to confronting the implications of disaster. At the same time, they are least prepared to face such disasters. Another major finding was that more than 70 percent of the firms covered by the survey do not have risk management plans. “Despite this evidence that catastrophe risk management is rising up the corporate agenda, there remains a sense among respondents that they do not devote as much time to preparing for potential catastrophes as they should.” The report also noted that respondents lack the time or resources to give catastrophe risk management their full attention. Eighty percent of respondents see preparing for catastrophe as important, but only 32 percent say they devote significant time or resources to the activity. In addition, 49 percent of the respondents feel that by devoting time and resources to preparing for catastrophe, they risk losing sight of more immediate priorities.
Catastrophe risk management can be a source of competitive advantage, the report pointed out. Although there are no immediate bottom line benefits from adopting good catastrophe risk management, 81 percent of companies believe that putting in place robust plans can be a competitive advantage. “With business networks becoming increasingly complex, participants in these networks can benefit by demonstrating to other members that they have considered catastrophe risk management and have processes in place to ensure resilience in the face of a major event,” the report said.
Speaking on behalf of his firm, Tareq Al-Sadhan, partner in KPMG Al-Fozan & Al-Sadhan, said: “Risk management is one of the most important areas of our work and the services we offer our clients help them confront and overcome the effects of any possible hazards. We offer a series of integrated catastrophe risk management advisory which includes services around regulations, information management, corporate governance, financial risk, managing security and privacy and continuity, in addition to strategic audits of performance, and many other related services”.
KPMG Al-Fozan & Al-Sadhan is KPMG’s member firm in the Kingdom of Saudi Arabia and part of the Middle East and South Asia region. Currently, KPMG Al-Fozan & Al-Sadhan employs more than 250 professionals who are distributed in its three offices in Riyadh, Jeddah and Alkhobar. The firm provides audit, tax and Zakah and advisory services through industry-focused, talented professionals.