What can changes in the external environment necessitate during risk and resilience management?

Changes in the external environment can significantly impact the dynamics of risk management and resilience strategies in organizations. Revisiting risk-sharing agreements is essential in this context because external factors, such as economic shifts, regulatory changes, and natural disasters, may alter the initial assumptions under which these agreements were made.

For instance, if a new regulation imposes stricter compliance requirements, the level of risk that both parties are willing to accept may change, requiring a recalibration of the terms agreed upon. Additionally, as market conditions fluctuate, businesses may need to renegotiate how risks are shared to ensure that both parties remain viable and maintain a balanced partnership. This flexibility is crucial for sustaining long-term relationships in an ever-changing environment, thereby ensuring that both parties are adequately protected from unforeseen risks.

While alterations in external factors may also lead to a need for extension of delivery terms, expanding supplier networks, or scaling back supplier engagements, these changes are more about operational adjustments rather than revisiting the foundational agreements that govern risk-sharing. Hence, the emphasis on revisiting those risk-sharing agreements reflects a proactive approach to adapting to new challenges, making it the most relevant option in the context of risk and resilience management.