Company CEOs advised to remodel businesses for life after COVID-19

Chief executive officers of companies have been advised to remodel their businesses to enable them to thrive after the COVID-19 pandemic has ended.

The Risk Management Association of Nigeria (RIMAN) in collaboration with EY advised businesses should expect a new normal and different consumer behaviour after the pandemic.

Folakemi Fatogbe (pictured), chairman of RIMAN board of trustees, however, said the recovery process would not be an easy one.

“We know that over two million people have been affected and many global leaders have actually been caught wrong-footed and we see that some of the responses came pretty late,” she said during a virtual webinar themed Risk Management for Business Resilience: The Now, Next and Beyond on Tuesday.

“What am I saying essentially is that it’s very difficult to dimension and come up with scenarios but as risks managers, it’s our job.

“Scenarios have always been about important elements of risks modelling, and business models will have to cope with the known and the unknown.

“So anything that we had before COVID-19 is clearly going to be wrong because none of us ever saw this coming. We need to look at expected loses going forward. Banks are to dimension over what they expect to see over a lifetime of credit risk.

“Risk managers must look at the expected credit losses in light of this significant credit risk as a result of COVID-19.

“When we are looking at our module and the scenarios, we have to look at the probability of the default in our various assets in different industry sectors, those that are doing well and those that are likely to face issues.”

Using the performance of crude oil prices and the stock exchange market as examples, Benson Uwheru, EY partner for financial services risks management, said the test for organisations “will not just be developing capabilities to deal with this disruption but the agility by which they can focus their resources and collaborate as a system to respond strategically in times like this”.

Drawing up an action plan for businesses, managers were advised to review objectives and strategies; determine impact of the external environment and new laws that may be put in place by regulators.

Ben Afudego, EY West African lead, said the above listed would play a big role as managers try to stabilise their businesses and optimize for a better performance after the lockdown.