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Monday, 29 October 2007 00:46

The Components of a Corporate Contingency Planning System

Written by  Brenda McGuinn
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Contingency Planning; Disaster Recovery; Business Resumption; Business Recovery Planning . . .

Many titles have arisen within this industry as it continues to grow and expand into the business environment from the data processing world and becomes recognized as an essential part of daily business operations!

Well, what is it?

I would like to share my vision with you regarding this subject, let us refer to it as Contingency Planning.
A successful Contingency Planning System will provide a Corporation with a strong program in each of these major areas;

1. People Safety
2. Business Continuity
3. Prevention
4. Management Commitment

People Safety

The People Safety issues are addressed in a type of Emergency Preparedness Plan. This plan organizes the corporate effort around an immediate reaction to life threatening situations. The Emergency Preparedness Plan must be coordinated with the emergency assistance agencies within your business community. To further support the Plan, necessary supplies need to be available within the Business units to meet the possible life safety needs. Likewise, it is important to identify those individuals within the organization who are trained to administer aid such as; fire suppression, medical care, etc.

The Plan must be well documented to clearly define the duties of each individual to ensure that all issues are addressed as quickly and as carefully as possible. The Human Resources Division and the Corporate Security Division must work together to provide adequate direction and planning to develop an effective process to administer the appropriate care to all individuals involved in a crisis.

Following Resolution of the life safety issues, management of the corporation is passed to the Business Continuity Plan which will drive all business activities. The Emergency Preparedness Plan will then address issues such as personnel property retrieval, building access, building cleanup and vandalism.


The Business Continuity Plan is actually a collection of plans from business units within the Corporation. Each Business unit must determine the critical functions which it will perform and outline the method by which these functions will operate within an alternate environment. The Plan establishes within the unit a team structure, reporting structure and a flow of information. Communication lines will be clearly identified And individuals will be given their responsibilities as team members.

The major objective of the Business Continuity Plan is to re-establish a network of the following:

1. Communication
2. Organization
3. Critical Functions

Communications: Business depends upon clear lines of communication. For example, there are internal communications such as, employees, management, business units. There are external communications such as, customers, vendors, the Press, family members of employees, regulatory agencies, investors, stockholders, TV reporters.

Internal communications must be re-established immediately to make employees aware of the event and to initialize the Emergency Preparedness Plan and The Business Continuity Plan. The employees involved in the initial response activities will need to communicate and assemble members. As the process continues communication, as always, is essential to the success of the business operations.

Furthermore, it is necessary to immediately re-establish external lines of communications following a disaster. It is essential that a Corporation manage their image with the financial community and among the employees.

The recovery effort is very dependent upon the public’s faith that a Corporation will survive a disaster. Therefore, the perceptions of the public and the employees are as powerful as the reality of the situation. Immediately following a business interruption, the Corporate Communications Business unit must issue a positive yet candid statement saying that the Corporation is functioning successfully in an adverse environment.

There are many methods of communications which include; written, media, video, face-to-face, phone, etc. It takes careful planning to determine the most effective method of delivery for a given message. It is just as important to analyze what information needs to be given to which audience and at what time.

After these decisions have been made, the plan must be documented and updated as the business environment changes.

Organization: Business depends upon clear lines of organization. For example, several groups need to be restructured in the disaster environment to ensure that they can interact such as, employees, management, stockholders, vendors, etc.

It takes careful planning to determine how a Business units will operate and how Business units will work together. It takes detailed planning to define a process by which Business units can be relocated to alternate sights. The work flow must also be re-organized to establish priorities of production. And the plan must assign employees to all the teams and make team leader assignments.

After these decisions have been made, the plan must be documented and updated as the Business environment changes.

Critical Functions: The main purpose of a plan is to allow the critical operations of a business to continue in order functioning to satisfy the demand for products and services by the customer base. Thus, this section of the plan is often referred to as the “meat” of the plan. To put it another way, it is here that “the rubber meets the road” in successful planning. The alternate operations defined in this section must work! The instructions given to the workers must be accurate and must produce the products and services. There is no time for second guessing a decision. The plan must state clearly and precisely the order of operations and the established lines of authority.

The existence of the Business Continuity Plan is becoming an intricate part of the way we do business. Management is becoming aware of the risk that the Corporation would face should a disaster occur and there be no plans available to direct operations in a less than standard environment. With a Business Continuity Plan a Corporation can survive varies types of business interruptions and still be capable of producing their products and services.


The very existence of a Contingency Planning system is a prevention tool against a financial disaster due to a business interruption. However, to further manage the risk of a business interruption, it is important to include preventive measures in the daily business operations. A Prevention Plan incorporates risk evaluations into the decision making process of how the business operates and in the setup of the environment. It also identifies possible improvements that can be made to lessen the likelihood of a business interruption or at least lessen the impacts.


While describing what it takes to develop a good and effective Contingency Planning System, we have mentioned such inputs as organization, communication, identification of the critical functions, in addition, I would add one more ingredient - Management. It is essential that Senior Management support the entire Contingency Planning System to include:

1. Empowering a focal point to establish corporate guidelines for Contingency Planning, to coordinate its development throughout the Corporation and to ensure that plans are workable and current.

2. Approving proposals presented by the focal point on strategy, acceptable levels of risk and budgetary issues.

3. Establishing the expectation of all business units to incorporate contingency planning into the way they do business.


To ensure that the Contingency Planning System is successful when called upon, it must be enrolled in a maintenance plan. The Maintenance Plan will test the methods of communication and organization within the Plan. The test will ensure that operational plans for the critical functions are workable and current.

Of course, to develop this novel and then place it on a self only to be reviewed for maintenance would seem less than adequate. The existence of the program needs to be publicized and employees need to understand the necessity of Contingency Planning within the work place. This can be accomplished through an Awareness Program. The Awareness Program will send a message to employees and to external customers that this Corporation can weather a disaster and remain financially stable.

In conjunction with an Awareness Program, a Training Program is needed to teach individuals how to implement the plan and what their individual responsibilities will be during the disaster. These sessions will include a brief explanation of senior management’s commitment and will emphasize the corporate-wide efforts to maintain an effective Contingency Planning System.

Let’s recap the components of an effective Corporate Contingency Planning System:

1) Emergency Preparedness Plan - People Safety
2) Business Continuity Plan - a network of communications and organization
3) Prevention Plan
4) Management Commitment
5) Maintenance Plan
6) Awareness Program
7) Training Program

Brenda McGuinn is Assistant Vice President and Contingency Planning Manager of the First Union National Bank of North Carolina.

This article adapted from Vol. 2 No. 3, p. 6.

Read 2299 times Last modified on Thursday, 11 October 2012 08:18