Kathryn Yap Business Times 24 Mar 11;
SINGAPORE is relatively safe from natural disasters but businesses here can still feel the impact if they have operations or suppliers that are based in Asia-Pacific countries that are disaster prone. After the March 11 Japan earthquake and tsunami, for example, the share prices of companies listed on Singapore Exchange with business interests in Japan, such as Global Logistic Properties, Mapletree Logistics Trust and Parkway Life Reit, were being closely monitored.
People living in Asia-Pacific are 25 times more likely to be affected by natural catastrophe than Europeans or North Americans and four times more vulnerable than those living in Africa, according to the Asia-Pacific Disaster Report 2010 by the United Nations.
Natural hazards of almost every kind can be found in Asia-Pacific - from earthquakes to droughts, from floods to tsunamis. Specialists argue that the situation will get even worse with the impact of climate change. Philippines, Indonesia, Vietnam and Australia, countries closest to Singapore, are listed as four of the top 10 Asia-Pacific countries to have the highest number of disasters between 1980 and 2009, according to the same report.
A natural disaster in any of these locations could have immediate impact on a company's stock price, not to mention employees, morale, facilities, day-to-day operations and the company's ability to perform. Business leaders in Singapore must ensure their businesses have integrated emergency management systems and appointed senior executives in place before disaster strikes, so they will know how to mobilise resources quickly. Thorough analysis of vulnerabilities, crisis response strategies and crisis implementation for the company should be conducted periodically.
While most companies have in-house risk-management teams and disaster-recovery strategies in place, CEOs in Singapore with overseas business interests must themselves be amply prepared too.
Personal leadership qualities can make all the difference between a company that barely survives through challenging and difficult times and a company that leaves a lasting positive legacy on affected communities, its reputation and value.
A case in point is the response by leaders at Exxon to the (man-made) Exxon Valdez oil spill disaster. During natural disaster management, CEOs and business leaders face extraordinary demands as they have ultimate responsibility and accountability for the company and the actions of their staff. Decisions made in the first hours of a company emergency especially can have far-reaching and lasting consequences.
Yet it is during the first few hours that CEOs have the least amount of resources to assist them in the decision-making. Such conditions place CEOs at considerable risk on many fronts: professionally, legally and financially.
To mitigate against such risks, CEOs and business managers must be personally prepared for both situational awareness and self-awareness in a crisis. Disaster management, after all, is a test of real leadership.
Having situational awareness means having the ability to effectively coordinate all functions of the crisis response through frequent communications, to correct mistakes early and to monitor what stakeholders and the media are expecting.
Effective leaders will focus their attention on mobilising appropriate responses to protect corporate value and demonstrate the credibility to manage emergencies brought on by natural disasters. Effective leaders also demonstrate self-awareness and their position as role models. Keeping commitments, honesty and trustworthiness are paramount personal leadership traits.
As news of natural disasters become more frequent, Singaporean companies that venture abroad need to ensure that both they and their leaders are well prepared to respond and protect shareholder value.
The writer is managing partner, CTPartners in Singapore. She has nearly 20 years' experience in placing CEOs, CFOs, COOs, CIOs and members of boards of directors for global companies
