Booklet: Business Continuity Planning
Section: Board and Senior Management Responsibilities

Senior management and the board of directors are responsible for identifying, assessing, prioritizing, managing, and controlling risks. They should ensure necessary resources are devoted to creating, maintaining, and testing the plan. The board fulfills its business continuity planning responsibilities by setting policy, prioritizing critical business functions, allocating sufficient resources and personnel, providing oversight, approving the BCP, reviewing test results, and ensuring maintenance of a current plan. The effectiveness of business continuity planning depends on management's commitment and ability to clearly identify what makes existing business processes work. Each financial institution must evaluate its own unique circumstances and environment to develop a comprehensive BCP.

The board and senior management should designate personnel to participate in BCP development. Properly allocating resources will challenge an institution throughout the development and maintenance of a BCP. A large, complex institution may need a business continuity planning department with a team of departmental liaisons throughout the enterprise. A smaller, less complex institution may only need an individual business continuity planning coordinator. While the planning personnel may recommend certain prioritization, ultimately the board of directors and senior management are responsible for understanding critical business processes and subsequently establishing plans to meet business process requirements in a safe and sound manner.

Business continuity planning is the process whereby financial institutions ensure the maintenance or recovery of operations, including services to customers, when confronted with adverse events such as natural disasters, technological failures, human error, or terrorism. The objectives of a business continuity plan (BCP) are to minimize financial loss to the institution; continue to serve customers and financial market participants; and mitigate the negative effects disruptions can have on an institution's strategic plans, reputation, operations, liquidity, credit quality, market position, and ability to remain in compliance with applicable laws and regulations.