Keep it legal: Contingency plans

On 11 September 2001, I was working for an investment bank that had trading partners in the World Trade Center.

The anxious silence that engulfed the trading floor as we watched the horrific events unfold didn't last long; within hours the demands of commerce activated disaster-response plans worldwide.

Few disasters have such lasting impact, but commonplace occurrences, such as a burst pipe that caused seven months of disruption at the charity MedicAlert (Third Sector, 27 February) can threaten a charity's short-term sustainability.

Initial reactions can cause more damage than the event itself, though. The Charity Disaster Recovery Network says: "Disasters and crises often involve some degree of shock, which can push people into panic or inappropriate actions."

When a suspicious bag was discovered outside the charity I used to work for, our office manager had the presence of mind to lock down the building. While we stayed away from the windows, the police destroyed some absent-minded fool's sweaty gym kit. Had it been a bomb, a panicked evacuation would have put lives at risk.

Charities' disaster-response plans too often consist of little more than vague arrangements with other charities to camp out in their offices if necessary. However, it is a legal requirement under the Charities (Accounts and Reports) Regulations 2005 that annual reports include confirmation that major risks have been identified and reviewed, and that systems have been established to manage those risks.

Full-blown disaster-response plans are not always appropriate, but trustees need to evaluate potential risks from natural and man-made disasters, equipment and supply failure, fraud and regulatory action. Plans should be formulated that deal with the aftermath of each incident, covering the operational functions that need to be resumed, in what sequence and by whom. You should test the plans and update them as necessary, and make sure there is a clear chain of command in which everyone understands their roles.

Storing key documents, such as leases, title deeds, insurance certificates and data back-up, off-site but in an accessible place will reduce administrative headaches. And always keep the details of a reliable plumber close to hand.

- Tim Waldron is head of the charity and community team at Coffin Mew LLP.

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