Heightened awareness of the need for better standards of corporate governance is forcing companies to focus on risk and business continuity management. In the US high profile corporate failures such as Enron led to the Government introducing the 2002 Sarbanes-Oxley Act. Under the Act a company’s directors and officers are now personally responsible for control failures within their organisations. In the UK directors will increasingly face litigation where they are seen to be in breach of their Companies Act duties, particularly in view of the introduction by the 2006 Company Law Reform Act of ‘enlightened shareholder value’ duty.

In the UK a document entitled “Guidance On Internal Control” known as The Turnbull Guidance, was published in September 1999 and included as suggested good practice in the July 2003 Combined Code On Corporate Governance. Turnbull highlighted the importance of internal control and risk management stating that “a company’s system of internal control has a key role in the management of risks that are significant to the fulfillment of its business objectives. A sound system of internal control contributes to safeguarding the shareholders’ investment and the company’s assets”.

Increasingly Government is taking an active interest in Risk Management and Business Continuity Management through the auspices of the Tripartite Authorities – HM Treasury, the Bank of England and the Financial Services Authority. These came together in the Tripartite Standing Committee (TSC) established in the 1997 Memorandum of Understanding for Financial Stability, revised in 2006. Under the aegis of the TSC, the Authorities maintain a framework for the management of operational disruption, within which they seek to identify and promote high standards of business continuity within the private financial sector. Also in November 2006 the Financial Services Authority published a Business Continuity Management practice guide for the UK financial sector.

Further Government guidance is also found in The Orange Book Management of Risk – Principles and Concepts published by HM Treasury in 2004. Legislation and planning has also been introduced from the perspective of a threat to national security or stability for example, The Civil Contingencies Act 2004. Also a National Capabilities Survey conducted in 2006 will be repeated on a bi annual basis and forms an important part of the Governments overall National Resilience Plan details of which can be found at www.ukresilience.info
Guidance can also be found on the Cabinet Office website ‘Preparing for Emergencies’ at www.pfe.gov.uk