Organisational resilience during significant change

Across the UK many public and voluntary sectors are dealing with or about to face significant organisational change. Maintaining organisational resilience and continuing to deliver for people and communities is front of minds.

The ability to not only withstand but also adapt to significant changes, whether structural, technological, or cultural, is essential to an organisation’s long-term success and sustainability.

When facing into change there are some key areas for insurance and risk leads to consider.

The first step is to get to know everything you can about the change, then work out the potential impacts and issues arising from it:

1. Conduct a comprehensive risk assessment:

• Identify the nature and extent of the changes. Change is multifaceted; it may arise from shifts in management, budgetary constraints, adoption of new technologies, or transformations in public policy.
• Assess the impacts of the changes. Assess their potential impact on operations, stakeholder relationships, and overall risk exposure. Conducting a comprehensive risk assessment can provide insights into new and emerging risks that may not have been previously considered.
• Obtain good quality data. Understanding your risk profile as it changes and evolves is essential to ensure you employ the right mitigations (including insurance). Work with managers, contractors and stakeholders to collate the risk data and information you (and your insurers) need. Importantly, update the data as things change.
• Conduct scenario analysis to understand how different changes could affect the organisation and its operations to inform decision making and option analysis.

Step two is to reassess your risk transfer strategies and arrangements in light of what you have found out:

2. Review and update insurance coverage:

• Regularly review existing insurance policies to ensure they remain relevant and adequate in response to the changes as they evolve.
• Determine whether current policy limits are adequate given any increased risks. Higher exposure may necessitate higher coverage limits, particularly in areas such as liability or property damage.
• Identify any coverage gaps that may have arisen due to the changes, and explore additional or new types of insurance.
• Work with insurance providers to tailor policies that specifically address the unique risks associated with any significant changes. For example, there may be a need for Shadow Board cover.

Step three is to review and reform your risk management plans, protocols and controls in response to the changes:

3. Strengthen risk management practices:

• Collaborate across risk functions to ensure your risk architecture and framework remains robust. Integrate and collaborate across risk, insurance, audit and operational risk functions. As organisational structures change, review networks to ensure all functions remain involved.
• Update business continuity plans to reflect the current risk landscape and ensure they can handle new challenges.
• Educate employees about the new risks and the importance of risk management and insurance in safeguarding the organisation through change.
• Implement training programmes to equip employees with skills and knowledge to handle changes and carry out decision-making effectively.
• Foster open communication channels to ensure employees are informed about the importance of risk and insurance through organisational change, and can provide feedback.

Step four is to influence on the need to effectively manage risks through changes:

4. Stakeholder engagement and communication

• Maintain regular engagement with insurance providers to discuss any changes and their implications to enhance coverage relevance and effectiveness.
• Speak to procurement early and often. Organisational change can offer risks and opportunities for contractual arrangements, including insurance contracts. The Procurement Act 2023 offers greater transparency, flexibility and more robust performance management that is enhancing suppliers’ accountability. 
• Involve key stakeholders, including leadership teams, as well as suppliers and partners, to ensure an agreed, collaborative, coordinated and comprehensive approach to risk and resilience. Maintaining transparent communication regarding changes and associated risks is important to build engagement and trust.

Step five is to keep doing all of the above! Change is ongoing, and changes happen faster than ever. Risk management strategies have to be fit for purpose.

5. Ongoing review and adaptation

• Regularly review your schedule. In a dynamic environment, organisational needs evolve rapidly. Insurance policies and risk management strategies must be regularly reviewed and adapted. Establishing a schedule for these reviews ensures policies are continuously aligned with current operational needs and risk exposures.
• Ensure the organisation remains flexible and adaptable, continuously refining and improving risk, insurance and resilience arrangements as new information and risks emerge.

A proactive and dynamic approach to managing insurance and risk arrangements is essential for ensuring organisational resilience during significant change.