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Nouveau Risks: A New Frontier

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‘Where no one has gone before’

March 2020
Abhijit Yadav and Shreyas Vatsayan
BRG

With media coverage over the last few months inundated by COVID-19’s spread, its economic implications and various government-imposed quarantine strategies, conspicuously missing from the global commentary are firm, clear and precise mitigation plans put forth by corporate risk management teams. The current situation seems to be indicative of a global preference for reactive scenario-building measures to address risks, vis-à-vis a more proactive approach. The popular subscription of cost-cutting business models, such as ‘just-in time’ inventory management, offshoring and ‘lean manufacturing’ systems, has only compounded the issue, leading to widespread existence of fragile supply chains. Against this backdrop, authors in Harvard Business Review recently observed that “the vast majority of global companies have no idea of what their risk exposure to what is going on in Asia actually is; that’s because few, if any, have complete knowledge of the locations of all the companies that provide parts to their direct suppliers”.

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