Wednesday, November 5, 2008

ERM-BC-COOP: 4th year risk

I have noted in the past that "government" should be considered a risk.

My focus was on local and state government.

Licensing organizations. Regulators.

But the Federal government also is a concern.

The people of the United States just elected a new president, one who promises to change the way things are done in DC.

The new president will enjoy a same-party majority in both the Senate and House of Representatives.

(That, by the way, does not - as previous presidents have found - assure that all of the president's programs will receive congress' approval.)

It's far too early to guess at what the new administration, when it officially takes office in January, will do to keep its promise to change things.

An end to the war in Iraq could mean a cancellation of some defense-related contracts.

Big-bucks military modernization plans may be scrapped - or maybe not.

The size of the armed forces may be reduced and that would impact the defense industry - fewer troops mean few guns, transports, ready-to-eat meals, etc.

It could mean higher unemployment, but logically the first troops to be released would be Guard and Reserve who would return to their civilian employment - assuming they still have their old jobs. (The jobs are guaranteed by Federal law, but some weekend warriors are having to sue their employers - including the US Veterans Administration ! - to get their jobs back.)

Then there's The Bailout.

Backing the Big Banks is a done deal, even when some of the banks apparently told the Feds they did not want the funds.

Will GM get a loan to buy Chrysler? Chrysler was the first major company to get a Federal loan which, I'm happy to note, was repaid, with interest, on schedule.

Will home owners facing foreclosure get protection that the outgoing administration was reluctant to promote?

What about SMBs - Small (and) Medium Businesses? Will they receive any Federal benefits or breaks?

The president-elect promised tax breaks for everyone making (earning or just collecting?) $200k (I thought at one time is was $250k, but either way, I'm well under the cap). What about the people who are making nothing - zero, zip, nada. The unemployed. How do you give a tax break to people who have no income on which to pay taxes?

No matter which candidate won the Nov. 4th election, the US was bound to see change.

For the most part, the US goes through this change-of-government exercise once every eight years (with few exceptions, most presidents have had two four-year terms) and most often, after eight years of one party's philosophies, the nation is ready to try on the other party's ideas - it's a swinging pendulum that has kept the US on a fairly even keel for decades.

The first Tuesday in November should be a reminder on every ERM/BC/COOP practitioner's calendar that government - at all levels - impacts the organization regardless of the organization's size or product/service.

The impact may be positive; the impact may be negative. For us, the impact of the impact has to be considered a risk.

How can a positive impact be a risk? Consider that if Organization A benefits from a positive impact, so does competitor Organization B - who can respond most rapidly and most efficiently to take advantage of the change?

Being able to anticipate change - risk - is as much what our work is all about as being able to avoid or mitigate events that could would against our organization's interest.

It's going to be an interesting four years.

John Glenn, MBCI, SRP
Enterprise Risk Management/Business Continuity/COOP

No comments: