Managing risk requires an understanding of the changing dynamics of the environment in which a company operates. S Ramaswamy explains
In June 2013, exceptionally heavy rain in the northern Indian state of Uttarakhand washed away roads and bridges. Around 5,000 fatalities occurred, many thousands were left stranded, and the cost to the local economy was colossal.
As most commentators pointed out, this was a disaster waiting to happen. Yet no steps had been taken to prevent it. Worse still, as the events unfolded it was evident that the state machinery had no quick response plan in place.
Sobering evidence
Uttarakhand has significant investments in both hydroelectric power and tourism. Companies operating in these areas needed to have in place sufficient risk mitigation measures to deal with all eventualities, but most reports suggest that they didn’t.
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S Ramaswamy is vice president and group general counsel at Escorts, an engineering and construction equipment company based in Faridabad, India.
