Robust management of risk and strategy in uncertain times is not just about having a strong safety net, it is also about making sure that the net covers enough ground, business leaders said.
Besides making sure that internal issues such as corporate governance, balance sheet strength and data analysis are strong, leaders also have to keep an eye on the bigger picture both in terms of longer-term objectives as well as potential disruptions, those leaders said.
"Being change-agile in business is key to dealing with economic uncertainty," said PricewaterhouseCoopers Singapore executive chairman designate Yeoh Oon Jin. "It is what businesses do in preparation for the lean years that enables them to adapt and deal with tough economic conditions."
Businesses today are caught in a maelstrom of macroeconomic forces.
A simmering debt crisis in Europe threatens to boil over, while the United States is facing a combustible mix of a fiscal cliff, stubbornly high unemployment and a presidential election.
Those concerns threaten export economies in Asia, where nervousness about China's slowing growth casts a shadow over the entire continent.
"Amid challenges and uncertainties that confront companies, we observe four inter-related issues that command the attention of business leaders," said Sam Wong, partner at Ernst and Young Advisory. "They are strategic direction, operations, financial and talent management."
In terms of strategic direction, businesses worry about their business model and access to capital, Mr Wong explained.
On the operations side, support functions, supply chain issues and risk systems dominate the discussion.
Companies are also thinking about capital management - how to maintain liquidity and balance debt while keeping the ability to capture growth opportunities, Mr Wong said.
And human resources need to be managed as well, whether it is protecting talent or rationalising the workforce.
Businesses have not been blind to the need to address risk.
Between 2002 and 2010, KPMG's Risk Management Survey showed that adoption of enterprise-wide risk management frameworks have increased from just 4 per cent to 50 per cent of companies surveyed, said KPMG risk consulting partner Richard Tan.
It is in uncertain times that "we see an increase in financial, operational and compliance risks associated with running a business", Mr Tan said. "Consequently, we are seeing the impetus for enhanced risk management practices in support of building business resilience."
In thinking about risk, businesses have to first make sure that they cover the right issues, Mr Yeoh said.
For example, when thinking about expanding, it is important to think not just about how to enter a new market, but also how to stay there.
"Focus on the right strategic risks," he said. "Many executives focus on market entry risks, but underestimate the risks that come with market presence in a new country. They assume that it is enough to have good people on the ground and a good understanding of the land. As businesses seek growth outside familiar markets, they must adapt their risk practices to each country's economic, social and political conditions."
An intelligent and robust risk management system needs to anticipate issues and address them quickly rather than wait for problems to emerge, Mr Yeoh said.
"Be proactive, rather than reactive," he said. "These days, previously unknown risks can manifest themselves with unprecedented speed. To respond effectively, companies must adopt more sophisticated and integrated risk management approaches.
"If you simply ask, 'What could go wrong?', you could end up focusing on an endless list of scenarios instead of actively identifying key vulnerabilities and solutions for achievable outcomes. Business leaders must constantly return to the fundamental question: 'How must my business practices evolve, to profit from the torrent of change underway around the world?'"