The annual risk survey, released late last month, surveyed 500 C-suite executives across Australia, Asia Pacific, Europe, the Middle East, Africa and the Americas and set out to discover how business leaders adapted to the crisis or whether they suffered from “disaster paralysis”.

Marita Corbett, National Leader for Risk Advisory at BDO Australia, said the key survey finding was that companies that embraced the crisis responded better.

She said more than half of leaders admitted to welcoming the risk and finding that the impact of the pandemic was “less significant” or “much less significant” than they first expected in April 2020, compared to just 16 per cent of companies that admitted to being risk-averse.

When asked which factors prevented their company from adapting quickly to the situation, 24 per cent of risk-averse companies cited “stubbornness and choosing to continue with pre-pandemic plans”.

“We know that some companies managed to steady the ship faster than others,” Corbett said.

“Leaders who were able to make fast, effective decisions were better able to pivot business models and keep staff up-to-date and motivated.

“Others suffered from decision paralysis, as they waited and relied upon news to inform their next steps.”

One in four business leaders admitted they did not adapt to the pandemic as quickly as they could have, with 60 per cent citing “uncertainty or lack of clarity” as the reason.

Not surprisingly, 90 per cent of business leaders surveyed said the events of 2020 had triggered them to completely re-evaluate their company’s risk framework.

The survey also revealed that post-pandemic 81 per cent of business leaders believe the top risk job should be a C-suite position.

The report showed that family businesses and leisure and retail companies experienced the brunt of the crisis, with 37 per cent, 22 per cent and 22 per cent respectively saying the impact was “worse than they had anticipated”.

The professional services sector felt the least impact from the pandemic, with just 3 per cent of respondents stating the impact had been “much worse” than expected.

The manufacturing sector was the quickest to react and adapt, with many firms pivoting early to make essential products such as ventilators and personal protective equipment.

The report showed that one in four manufacturers said the pandemic’s impact was “less” or “much less significant than they expected”.

While companies faced many risks in 2020 – with geopolitics, economic slowdown and increasing competition all showing major upticks – it was the geopolitical risks that caused the most pressure for all companies globally in 2020.

More than half (53 per cent) of respondents to the survey had a global health crisis on their 2020 risk register, and while the wide-ranging impacts of COVID could not be anticipated, 58 per cent said having the risk on their radar helped to manage it in reality.

Corbett said anticipating and acknowledging a major crisis helped companies react quicker.

“What we know, and what came through clearly in our survey from the business leaders we spoke to, is that ignoring or failing to acknowledge the situation is the greatest inhibitor to fast and effective decision-making.”

Partner, Advisory at BDO in Adelaide Kyffin Thompson said locally there was a clear difference in stability between companies with leaders who were able to be proactive in their decision making and those who effectively entered a holding pattern.

“‘Decision paralysis’ left some companies unable to pivot their business models or effectively maintain staff engagement and motivation,” Thompson said.

“Culture impacts business performance enormously and this has never been more evident than in 2020.

“Companies with leaders who displayed a positive mindset and were able to minimise the impacts on employee satisfaction and wellbeing weathered the storm and in some cases, even thrived.

“Fear of blame is crippling for the ability of staff to think creatively and problem solve – and in turn reduces the business’ capacity to survive crisis.”

Access the full Global Risk Landscape Report 2021 here