In this blog, we explore the five key steps to developing a robust Business Continuity Management (BCM) plan to help you to understand your vulnerabilities and identify ways to avoid or mitigate the risks associated with them, ensuring you are well equipped for 2021.
Why do we need one?
The answer to this should by now be obvious. Risk management is one of the key foundations of good governance and the Charity Commission advises that Trustees should regularly review and assess the risks faced by their charity in all areas of their work. Most charities have risk registers and most charity Trustees and their management are very good at reviewing these registers on a regular basis throughout the year to ensure they remain relevant. However, in the past we saw very few who had listed ‘pandemic’ or other catastrophes as a risk.
Steps to develop a BCM plan
- Brainstorm situations
Proper time needs to be set aside with involvement from both Trustees and management. This is an investment in securing your charity’s future so don’t just pay it lip-service. A blue sky approach is often best, however, typical situations when a BCM plan is likely to be needed include:
- a pandemic
- extreme weather events
- IT/data issues
- renewal of insurance cover
- Work out what you need to do
You have thought of potential scenarios. The next step is to decide how you would react to them. For example:
- Water leak? The first step to consider would be who would turn the water off and do they know how to do it?
- Fire? How would the emergency services be notified and who at the charity should take charge?
- Building at risk of collapse? What is your evacuation plan?
- Pandemic? What are some effects of a pandemic on your charity? If there is a pandemic, how many people will be off work?
- The financial impact: how long can your charity operate without key revenue generating products or services while incurring costs to recover?
Start from the basic first steps and then escalate your response. Also, outside of your charity, you should consider who else you might need to contact to make them aware of such events such as insurers, bankers, beneficiaries and other stakeholders.
- How will you keep going?
Beyond the immediate disaster, your Trustees and management team will need to consider how to keep the charity operational, if this is possible.
- Firstly, the charity’s staff. Are they able to work remotely? Are they already equipped with the tools to do so or will you need to put this in place?
- Is your charity reliant on volunteers? What will you do if they are unavailable? This has been a pertinent issue in 2020, particularly for those charities operating charity shops, many of which are staffed by retired people.
- Who will make the decisions? In the event of a disaster, it is not always business as usual and the usual channels for decision making may not be appropriate.
- People are at the heart of charitable causes - what will happen if you can’t see beneficiaries face-to-face?
- How will your recovery plan shape up as we emerge from the other side of the crisis?
- Document the above and share
Make sure you communicate with staff so that everyone knows what role they have to play. Ensure the BCM document is saved or stored somewhere where people can have access to it if needed. Importantly, ensure there is at least one (up-to-date) copy stored securely in an off-site location.
- Review your charity’s insurance cover
Check the specific terms and speak with your insurers about what the terms mean and whether they can be enhanced. In particular, ensure you check:
- buildings and contents insurance
- business interruption
- indemnity
- Test and update
There is no point going to the effort and added time and expenditure of creating a BCM plan if it is going to gather dust. Make sure you review and test your business continuity plan regularly. This will help you decide if it works or if certain areas need refinement.
Specific areas to address during Covid-19
From cashflow management and the level of your charity’s reserves, to the relevance of activities and decision making processes, there are specific BCM areas you should consider as we navigate through these tricky times. Read more about the specific Covid-19 measures in our 2020 Charity and NFP sector outlook.
The next step
If you require any advice or support about your individual circumstances, please contact your usual UHY charity specialist, or contact us using the contact form.
