Risk Proof:A Framework for Building Organizational Resilience I N S I G H TR E P O R T Images:Getty images, Unsplash Contents Foreword Executive summary 1 A framework for building resilience ConclusionContributorsAcknowledgementsEndnotes Disclaimer This document is published by theWorld Economic Forum as a contributionto a project, insight area or interaction.The findings, interpretations andconclusions expressed herein are a resultof a collaborative process facilitated and © 2022 World Economic Forum. All rightsreserved. No part of this publication maybe reproduced or transmitted in any formor by any means, including photocopying Foreword Andre BelelieuHead of Insurance, AssetManagement and Institutional Bill ChurneyPresident, ExtremeEvent Solutions, Verisk all else as a critical driver and enabler of futureorganizational resilience: people and culture.Particularly given the significant changes anddisruptions driven by the COVID-19 pandemic,the human element of resilience was consistently The COVID-19 pandemic was the latest in a seriesof shocks to disrupt our economies and societies.Both the near- and long-term future will be definedby the capacity of institutions to weather such As a result, the concept of building resiliencehas taken on added urgency within the businesscommunity, and more broadly across society.Emerging research shows that firms whichinvest more systemically in building resilienceare outperforming their peers. And while it is The framework outlined in this paper is the productof more than a year of in-depth interviews, casestudies, research and discussions within theWorld Economic Forum’s insurance and assetmanagement community. Both industries havebeen at the forefront of integrating resilience into Yet many institutions’ resilience journey is onlyjust beginning, or has not yet begun. Traditionally,there are several reasons why businesses andgovernments have underinvested in resilience.For one, resilience is often associated with cost –and seen as being at odds with the optimization At its core, however, we realize that one sectoralone does not hold all the answers. Organizationalresilience may look different depending on theindustry or geography. For this reason, the proposedframework is built around principles rather thanmetrics or standardized measurements. Our hope This paper is a first attempt to demonstrate theimperative of investing in resilience and to outlinea series of pragmatic and actionable steps thatcompanies can take to overcome shocks andgrasp new opportunities. Considering resilienceacross five pillars – operational, strategic, financial, Many excellent papers and articles have alreadypointed to the growing importance of resilience andframed the risks that businesses and societies arefacing. Our intention with this paper is to acceleratethis broader conversation about the importanceof resilience and to fill a gap within the existing Building the capacity to weather disruptions intobusiness operations and supply chains is a criticalpiece of this organizational resilience imperative. Executive summary We have entered an era that will increasingly bedefined by risk. The latest World Economic Forumannual Global Risks Report assessed the likelihoodand impact of a series of economic, environmental,geopolitical, societal and technological risks, and define, identify and develop resilience in theirorganizations so that they can weather anycrisis. And while the paper identifies five pillars ofresilience – operational, strategic, financial, social One of the key challenges facing business leaderstoday is how to prepare for this future. Traditionally,businesses have been confronted by one shockor one disruption at a time. But even in the face ofsuch singular events, history has more often shownthat business has underestimated the likelihood ofsuch events and shown limited understanding of The resilience of an organization is based on itspeople, who form the foundation of its responsebefore, during and after a crisis. Unlike strategicand operational resilience, which could encounterissues beyond an executive’s control, the buildingof organizational resilience is an area in which This framework is deliberately built around fourkey principles that will be critical for businesses tobecome and remain resilient in a volatile future: –Resolveis the organization’s will to survive. Following the onset of the COVID-19 pandemic,there has been a broad understanding of this newnormal, which has given rise to a new imperative– the need to invest in resilience. Resilience isoften defined as the capacity of institutions towithstand disruption and recover quickly. Butemerging research is pointing to the broader role –Communicationis necessary to move fromprincipled commitment to developing the –Agilityfacilitates execution so that companies –Empowermentenables individuals to takeownership and collaborate with peers to meet The intention of this report is to spur