While some people find it difficult to accept the severity of the global economic meltdown, it can not be denied that as things become economically more difficult, business risks will continue to increase. This is especially accurate when considering the impact of high interest rates and increasing unemployment on individuals and families.
"The financial risks of the recession are known and companies are taking drastic cost-cutting and optimisation measures to ensure they are able to weather the downturn, but the human impact is generally being ignored," says Amir Lubashevsky, executive director of Magix Integration. "The human impact here is not the difficulties faced by those who have been retrenched, but the risks businesses face from demotivated employees, or those who know they are about to be let go."
With only a few exceptions, South African companies have not made sufficient preparations to deal with the human risks they will face, nor implemented the corporate governance standards that would enable them to easily adapt to higher risks. Risk management in South Africa is more a factor of doing what you have to do and building independent silos of competence.
"Corporate South Africa is simple not in a position to actively protect itself from increased internal security risks," adds Lubashevsky. "And as more people face economic difficulties, some will look at their companies' assets as a way to resolve the situation."
Most companies are able to prevent, or at least detect traditional fraud and theft, but are unprepared for the manner in which modern employees can make extra money at their employer's expense. A cellular phone, for example can easily transport the corporate customer database out the door without anyone being the wiser – and someone will be willing to pay for that. An almost undetectable USB storage device can hold plans, strategies and new product developments, again with willing buyers on the outside.
If a business does not understand where its value lies and make appropriate plans to protect it from all threats, it should expect to feel the impact of crime as others realise the value and help themselves. The answer is not to make special preparations for circumstance-fuelled fraud, but to implement a holistic security policy based on corporate governance processes that empower the business to protect itself, while being flexible enough to adapt to changes in the business or economic landscape and the associated increased risks.