By Jim Wetekamp, CEO of Riskonnect | Published by Corporate Compliance Insights, August 14, 2023
In the nearly six months since the failure of Silicon Valley Bank (SVB), three others have gone belly-up, the most recent of which was just last month. While many have focused on the risk-related causes of SVB’s failure and the lessons one could draw from it, Riskonnect CEO Jim Wetekamp shines a light on a less-discussed angle: business continuity.
The Silicon Valley Bank (SVB) collapse and its aftermath exposed several glaring risk management failures. But there’s one important lesson the companies directly impacted and those watching from the sidelines should take away from the downfall: Don’t underestimate the value of business continuity.
The bank’s demise was precipitated by a number of events:
- The chief risk officer role was vacant for eight months.
- The bank’s relentless pursuit of profit took precedence over sound risk management and led executives to change risk model assumptions that didn’t fit their desired narrative.
- The CEO’s shortsighted transparency on the bank’s financial troubles sparked panic.
- Executives overlooked the threat of social media, which caused the internet-fueled bank run.
Each of these risk management issues played a critical role in the bank’s collapse – but the magnitude of the problem was missed because SVB executives weren’t thinking enough about business continuity.
The purpose of business continuity is to be prepared for anything that could disrupt operations. Think ahead about potential risk events and the impacts, no matter how unlikely or unpredictable they may seem. If you don’t have a clear and effective plan and response strategy in place beforehand, you’re dead in the water when crisis hits.
Find out what three things business continuity planning offers by reading the full article in Corporate Compliance Insights >>