Business Continuity Lessons from the Christchurch Earthquake

(Audit & Risk, 26 January 2012)

In Brief: Close to one year after the earthquake that sadly devastated much of the largest city on the South Island of New Zealand, this author proposes 12 lessons learned for companies. These include: modeling scenarios to test the response of continuity plans, regularly training employees at all levels, having all personnel data and contact information up to date, and maintaining high quality insurance.

Our View: Due to the scale and impact of large natural disasters or other catastrophic events, business continuity planning (BCP) for many companies has focused largely on disaster recovery. In this context, BCP remains a latent risk since business continuity management is not only about disaster recovery, but also about a firm’s operational resilience. To ensure management invests sufficient resources in BCP, Internal Audit should review the company’s strategy at the enterprise and business unit level, as well as test the measures necessary to steer the business through both catastrophic disasters and disruptive fluctuations in the business environment.