Shareholders in Primark, a UK budget fashion retailer, would have been concerned when they heard about the fire that, overnight on 2 November, destroyed its offices, distribution centre and a substantial part of the stock, just at the start of the busy pre-Christmas period. Shares in ABF Foods, its parent company, declined about 2% in early trading the next morning.
The shares, however, quickly recovered and then went up. Why?
According to Times Online: “the shares moved back into positive territory following ABF assurances that it was fully insured for stock loss and disruption and that it had moved swiftly to repair its supply chain.”
Clearly, the board of ABF had, at some point, decided about an appropriate level of stock loss insurance and, even more importantly, had made adequate business continuity arrangements that would enable the business to continue trading in spite of a major disaster such as this one.
Is business continuity planning a major board governance responsibility? You bet!
