Which shocks would hurt us most, and how do we prepare for them?
Tests the plan against scenarios and stress cases, measures the exposure and sets the contingency plans your leadership team approves in advance.
What you receive
The risks that matter, the exposure under each scenario, the risk appetite and the contingency plans.
The base case with the upside and downside scenarios fanning out around it over the plan period.
When to open it
- Your risk team faces rising volatility in prices, rates or demand.
- A regulator or a rating agency asks for stress tests.
- Disruptions expose gaps in the contingency plans.
What the project covers
- Risk inventory: strategic, financial, operational and external
- Scenarios and stress tests on the plan
- Exposure by business, counterparty, supplier and region
- Risk appetite and early-warning indicators
- Contingency plans and the triggers that set them off
What your team brings
- Financial plan and its model
- Risk register and internal audit reports
- Exposure data by counterparty, supplier and region
- Insurance programs and hedging positions
- Business continuity plans and incident records
In your report
- Exhibit 1
A scenario fan shows the range around the base case
The base case with the upside and downside scenarios fanning out around it over the plan period.
- Exhibit 2
Exposure by risk shows where contingency plans are needed
Each material risk by its exposure in the downside scenario, with the contingency plan it calls for.
Where it applies
- Insurance
How would a run of severe storm seasons affect our solvency, and what reinsurance should we buy?
Our exposure by region, the loss scenarios we model and the cost of each reinsurance structure.
- Agriculture and food
What happens to our margins if two dry seasons cut our main crop by a third?
Yields and prices under each scenario, our contract terms with buyers and the alternative sources we can secure.
- Chemicals, materials and mining
How would our cash flow hold if the price of our main metal fell by 40 percent for two years?
Cost position by mine, the covenants on our debt and the capital spending we can defer.
- Transport, logistics and infrastructure
If a key shipping route closed for six months, how would our network and clients cope?
Volumes by route, the capacity of alternative routes and the contract terms on delay and cost.
Start with this engagement
Write to hello@tacitude.com with the project you have in mind, and we frame the engagement with your team.