Ever since the global economy took the worst dive in recent memory, CEOs have been looking for ways to help their companies endure and, perhaps more important, to figure out how to emerge from the crisis ahead of their competitors. It is not just financial risks and recovery that should concern us, though. We cannot overlook physical risks-especially at a time where natural disasters worldwide are increasingly gaining the spotlight.
Often relegated to the "nonessential" column during budget-cutting periods, a physical risk-management program can offer tangible business benefits, according to a new study conducted by research and analytics company Oxford Metrica and commissioned by FM Global. Data from The FM Global Risk/Earnings Ratio Study indicates that businesses with strong physical risk-management programs produced, on average, earnings that fluctuated by only 18 percent as compared with earnings volatility of more than 30 percent among companies with weak physical risk-management practices.
In short, a sound physical risk-management program can help strengthen your company's position, putting you ahead while your competition is busy putting out fires or recovering from a natural disaster.
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