Navigating Crisis Preparedness: A Middle East Perspective
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January 21, 2025
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2025 is lining up to be a year of uncertainty. With crisis events becoming more varied, more frequent and often times more severe, crisis preparedness is an essential cornerstone of organisational resilience. But with limited resources and no crystal ball to see the future, what should organisations prioritise?
Regional Risks in Focus: Environment, Healthcare and Reputation
Turbulent Waters, Trusted Anchors: The General Counsel’s Evolving Role in Navigating Crises an Economist Impact report sponsored by FTI Consulting, found that around one third of general counsel (“GC”) globally noted reputational and operational risks as not only the crisis events posing the greatest risk to their business, but also ones that they are least prepared for. Uniquely, the survey results for the Middle East found that both healthcare and environment appear in the top five crises posing the greatest risks to their organisations.
It’s no surprise to see these aspects higher on the GC agenda than in other regions. Climate risks, such as rising temperatures and sea level, pose a particular threat to major economic hubs in the region — we see these concerns already reflected through high-profile initiatives such as the UAE’s Net Zero 2050 Strategy and Saudi Arabia’s Green Initiative.
Similarly, with an aging population and growing expat community, the region is investing heavily in healthcare infrastructure as part of their national development plans, Saudi Vision 2030 and UAE Vision 2071, aiming to position themselves as global leaders in medical tourism and advanced healthcare. This also aligns with the region’s strategy to diversify and become less reliant on the oil and energy industry, which has been the foundation of growth for many years.
Unusually, respondents from the Middle East found reputational crisis to be less of a concern — with just one-fifth citing it as a top risk, in comparison to one-third of their global counterparts. However, just because reputational crisis risks aren’t currently high on the agenda doesn’t mean they shouldn’t be. More than a quarter of respondents from the Middle East cited reputational risk as one of the crises they are least prepared for, suggesting that there is a need to place increased emphasis on this and an element that GCs ought to be aware of in their planning. Beyond damaging a business’s brand, reputational crisis events today can pose significant financial risks to organisations, especially with information being more accessible than ever. The advent of the constant news cycles and the availability of a range of information streams on social media platforms means that preparedness from senior leaders becomes an imperative, particularly to avoid scenarios becoming exacerbated and inflated.
Expecting the Unexpected: Creating Contingency Plans
The report also found that about half of organisations globally do not have contingency plans for high impact internal and external crisis events. Businesses operating in the Middle East in particular are acutely aware of the complexity of the regional geopolitical landscape and the challenges it brings. This unenviable position is likely why, according to the survey results, 58% of organisations across the Middle East have contingency plans already in place — in comparison to 55% globally.
In 2024, the UAE made significant changes to its bankruptcy laws, overhauling its insolvency and restructuring regulations to align with global, more business-friendly best practices and to position the UAE as a competitive hub for economic strength. However, the benefits of change come hand-in-hand with the possibilities of risk, including the potential for revenue loss or penalties for noncompliance, as well as the knock-on effect to reputation. With just 53% of organisations in the region having existing bankruptcy contingency plans, this is an area that should be prioritised sooner rather than later.
Though the Middle East has a number of national-level cybersecurity frameworks in place, including the UAE’s National Cybersecurity Strategy and Saudi Arabia’s National Cybersecurity Authority, organisations shouldn’t rely on those alone to provide sufficient protection. Particularly in areas such as finance and retail, there has been rapid digitalisation that is outpacing security measures, and it’s essential for organisations to put in place measures that are tailored to their business and level of risk exposure. Though cybersecurity preparedness can require significant investment in technology, talent and training, the long-term impact when something goes wrong can be catastrophic — from loss of trust, regulatory penalties and operational downtime.
Although crisis preparedness can feel at times like guesswork, companies that effectively manage their risks have senior leaders are actively involved in creating crisis contingency plans, monitoring risks, fostering a mindset that “any scenario is possible” and building culture where all risks are taken seriously. Ultimately, organisations that consider the “what if” are better prepared to manage risks and take timely action, whereas companies that lack this can experience a disconnect, where business continuity teams respond independently and potentially in conflict with executive decisions.
Note: Economist Impact regional data: Middle East can be found : here
Published
January 21, 2025
Key Contacts
Senior Managing Director, Head of Middle East Corporate Finance & Restructuring