Business continuity plan 167
have varied greatly but according to our standards an appropriate level
would be 1 per cent of AUM.
Normally insurance is taken in relation to professional indemnity,
directorsand officers’ liability, or key person’s risk. Asking for evi-
dence of the level of cover is very useful. Reviewing the fact of any
cover will provide you with information on the limit of liabilities and
what exactly the manager is insured against. You could also check
whether the manager has ever claimed on any of its insurance policies
as this may be indicative of past complaints.
Insurance, with its role as part of good corporate governance and com-
pliance, should be reviewed and is an easy way again to gain some
useful insights.
Business continuity plan
Business continuity plans are often required as part of the regulatory
context. They are also good to have in place for any business. I like to
know about them and the approach taken by managers when it comes
to setting up and monitoring their business continuity plan. To under-
stand and check such aspects of the manager may seem mundane but
again reveals a lot about understanding the potential risk management
and culture in place at the manager.
First off it is useful to find out if there is any plan at all. I don’t mean
some soft plan based on an undocumented idea of a back up being
effected on a local laptop. I would expect a proper plan to be designed
to save the manager’s data at any time ahead of an unforeseeable
catastrophe. I would also expect the plan to be kept in hard copy as
opposed to being kept on the company’s server, as what good is that
in the case of IT failure! The existence of intelligent planning is always
reassuring and shows good corporate governance. To properly guard
against disaster and ensure business continuity, a manager should
have in place a step-by-step plan that outlines the procedure to be fol-
lowed in the event of a disaster. It should detail, among other things,
the people responsible for actioning the plan, where the manager can
relocate on a temporary basis as well as how to return to the place of
business after the disaster.

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