The West African Lead, Ernst&Young (EY), Mr Ben Afudego, says there are four things that organisations need to do in the next phase, when planning to get back to work after COVID-19 lockdown.
He spoke on Tuesday, during an on-line COVID-19 webinar conference on Risk Management, organised by EY in collaboration with Risk Management Association of Nigeria (RIMAN).
The theme of the conference was: “Risk Management for Business Resilience: “The Now, Next and Beyond”.
Afudego said: ”First is that you have to perform a review of your objective and strategies.
“As you do that, you need to look at the external environment that are going to affect your business.
“You need to look at your vendors, your suppliers or third party that provides you with technical support to know if they are still available to still be in business after the lockdown.
“You also need to look at the regulators, if they are going to come out with a new mechanism around which you will operate.
”So, all these four external levels are going to challenge what you do as you try to stabilise your business and optimise it for better performance after the lockdown,” he said.
Other top risks managers, at the online seminar, also advised organisations to prepare for the post-COVID-19 economy, to create sustainable businesses going forward.
The President, RIMAN, Chief Risk Officer, Coronation Merchant Bank, Mr Magnus Nnoka, advised business owners to begin to think of new business approaches that they would be needing post-COVID-19.
“We are in a crisis period globally, and what this means is that when we come out of the COVID-19, we are going to be talking of the past, because some of the things we have seen in the normal situation, we are going to have a new normal.
” This means that some of the risk approaches we have used in the past may not be of any use anymore.
“Some of the products we have also offered to customers might not be what the customers are also going to be expecting.
“So, we are going to see a new normal, and that new normal will come with a new opportunity and challenges and with new approaches,” he said.
Mr Benson Uwheru, Partner, Financial Services Risks Management, EY, urged organisations to re-prioritise in order to stay abreast of the key issues on the pandemic.
He said: ” Oil plunged to its lowest and traded less than 11dollars per barrel, just yesterday.
“CBN has also tried to devalue the naira from the initial exchange of 307 to 360 and this move will require dollar demands to move foreign exchange demands, which have its own negative effects on the Nigerian equity and fixed income market, with naira losing value to the dollar.
“The stock market has also taken a big hit due to the virus, market capitalisation has also dropped significantly.
“These just tell you that the virus has clearly disrupted businesses, organisations, families, communities, nations and the global economy.
” So, the test for organisations will not just be developing capabilities to deal with this destruction, but the agility by which they can focus their resources and collaborate as a system to respond strategically in times like this,” he said.
The Chairman, Board of Trustees, RIMAN, Ms Folakemi Fatogbe, said at a time like this, it was important for risk managers who were the CEOs in every organisation, to be guided when coming up with written outlines.
According to her, when looking at scenarios, they have to try and dimension what are the likely scenario right now, which nobody knows when it is going to stop.
” We know that over two million people have been affected and many global leaders have actually been caught wrong-footed and we see that some of the responses came pretty late,” she said.
According to her, it is very difficult to dimension and come up with likely scenarios, but it is the job of risks managers to do so.
“Scenarios have always been about important elements of risks modelling, and business models will have to cope with the known and unknown.
” So, anything that we have on model before COVID-19 in 2020 is clearly going to be wrong, because none of us ever saw this coming.
“We need to look at expected losses going forward; banks are to dimension over what they expect to see over a lifetime of a credit risk.
“Risk managers must look at the expected credit losses in light of this significant credit risk as a result of COVID- 19.
“When we are looking at our module and the scenarios, we have to look at the probability of the default in our various assets in different industry sectors; those that are doing well and those that are likely to face issues,” she said.