Although physical threats are “skyrocketing,” most C-suite leaders are unprepared to mitigate the impact on operations and people.
That’s according to a new report from critical event management provider OnSolve. The study found significant increases to three rising threats globally in 2022 when compared to 2021: infrastructure and technology (+688% globally, +807% in U.S.); transportation accidents (+211% globally, +296% in U.S.); and extreme weather (+72% globally, +42% in U.S.).
From tornadoes to train derailments to power outages, up to 10 physical threats occurred globally every minute in 2022. Despite this, more than half of CEOs surveyed (60%) have no plan to address all the most severe physical threats to their business. For almost half (46%), this lack of preparation means they have identified and planned for only some of the most significant threats to their organizations, leaving their people and operations at risk.
Additionally, only 37% of CEOs said they have a plan for extreme weather and only 29% have a plan for infrastructure failures. The number drops even lower to 25% for a plan to handle transportation accidents.
“Physical threats have significant ripple effects on businesses and industries, from impacting communities and workers to operational downtime and supply chain delays,” said Mark Herrington, CEO at OnSolve. “To better protect people and remain competitive, C-suite teams must lead the dialogue and be proactive in mitigating these physical threats.”
The report found that the physical threat landscape continues to evolve rapidly. Key takeaways include:
Physical threats have a cascading impact. The rise in physical threats is compounded by their interconnected ripple effects on other business operations. From road closures to power grid failures and chemical spills across entire communities, these ripple effects are the most challenging aspects of crisis preparation and management. Now more than ever, organizations must sufficiently prepare for all physical threats and the dynamic risks that may follow.
CEOs are aware of physical threats, but more involvement in mitigation strategies is needed. Every CEO believes its organization will face at least one physical threat in 2023. CEOs have noted that preparing for physical threats is now a top priority (38%)—even more than those prioritizing economic inflation (30%). While most CEOs (78%) delegate crisis management responsibilities, 18% admit they do not have anyone in the C-suite overseeing physical security and duty of care.
The C-suite is facing pressure from corporate boards and employees to address physical threats. Almost all (99%) corporate boards have asked executives for plans that combat physical threats. Meanwhile, employees are also concerned. Just over half of CEOs surveyed (51%) said their employees are sharing more concerns about physical security since the beginning of the COVID-19 pandemic.
CEOs acknowledge technology would protect their organizations from physical threats. While 93% of CEOs believe technology would help protect their employees and operations from physical threats, only 26% say they have invested in technology for that purpose (though an additional 48% are prioritizing such an investment this year).
The full report is available here.