Published: December 10, 2012

What are the key issues for businesses operating in unstable environments? This was the important question raised and discussed in Pilgrims' latest feature for City Security magazine.

Although it is tempting to think that an ‘unstable environment’ must refer to the streets of Baghdad or Kabul rather than the suburbs of Surrey, there are nevertheless factors which can render an otherwise stable environment deeply unstable, thereby increasing organisational risk exposure (think the London Riots, Bahraini civil unrest, the collapse of the Icelandic banks or the LA Race Riots), the article highlights.

The threats in an unstable environment where any international organisation has operations, or even intermittent travel, are many and varied. People are at direct risk from threats including road traffic collisions, terrorist or criminal action or open conflict. Capital is at risk from excessively lax or stringent regulatory environments; collapsing banks that can trap large sums of money indefinitely or relationships with partners, suppliers and customers on which adequate due diligence cannot be carried out effectively (among many others).

Operations are at risk from all of the above and from other factors, including austere environments, civil disorder interrupting supply chains or high levels of corruption inhibiting effective delivery of service. Finally, an organisation’s reputation is at risk from any impact to people, finances or operations: in effect from any of the threats above and many more not listed here!

What can businesses do to reduce their risk and protect themselves against the prevailing threats in unstable areas where they operate?

The answer is a simple one: Prior Preparation Prevents Poor Performance - “the five Ps”. Any organisation worth its salt recognises this and engages in prior preparation across their core operational activities.

Insurance, resilience, business continuity/disaster recovery and other measures are examples of prior preparation against foreseeable threats or risks. However, in an unstable environment such as Libya, KSA, Israel, Nigeria, India, Iraq (and most emerging markets, as well as some more developed ones) additional measures are called for...