An average of 57 per cent of EU companies have contingency plans in place, compared to 61 per cent globally, according to a report by Grant Thornton, published this week. In the UK about 77 per cent of businesses have documentation in place to deal with disaster recovery and a major IT failure. The level puts the UK in fourth place in terms of documentation globally and fifth place in relation to IT. Loss or destruction of property has throughout history been a major fear of business owners. In the food industry recalls by Cadbury and Nestle, floods in New Orleans and more recently in the UK, along with a bird flu outbreak at Bernard Matthews highlights the need for businesses to carry out contingency planning. The consultancy's report into the state of contingency planning surveyed 7,200 business owners across 32 countries. Grant Thornton asked companies whether they had formal documentation in place for dealing with key risk areas such as the loss of suppliers or customers, the loss of key personnel, disaster recovery and the security of electronic information. "Although the effects can be partially countered through insurance, the disruptive implications of a loss of plant or buildings are worrying, and a formal mechanism for dealing with such an eventuality is in place among a high proportion of respondents," Grant Thornton stated in its report, released this week. However business managers need to take a look at their information technology (IT) infrastructure. "A more recent, but equally critical issue, stems from the technological innovations of the past few decades," the consultancy stated in the report. "For a high proportion of business owners, a formal mechanism for dealing with security and privacy of electronic information is perceived as essential." In UK, 81 per cent of business have a plan in place for dealing with a breach in their security of electronic information, 80 per cent on the privacy of information and 73 per cent for the loss or destruction of property. These figures are good news for UK business and are above the EU and global averages, Grant Thornton concludes. For example, only 55 per cent of EU businesses are prepared for a loss or destruction of property and 74 per cent of global businesses are ready for a breach in their security of information. Alysoun Stewart, head of Grant Thornton's strategic services group said: "Risk management should be an integral part of every firm's strategic management, so it is encouraging to see so many UK businesses appearing to take the issue seriously. Identifying fundamental risks and taking steps to prepare for them is essential for minimising the impact of a disaster, which is key to the continuity of privately held businesses." However while UK businesses scored well on the major issues, they are somewhat less prepared in other key risk areas. Only 26 per cent f UK businesses have a formal procedure in place to deal with a potential reputation or media crisis compared with a global average of 35 per cent. Taiwan fared better, topping the table with 61 per cent, followed by Turkey at 57 per cent. "It is staggering to believe that so few business are prepared to deal with potential PR disasters," Stewart stated. "One only has to think of the food contamination scares involving Cadbury and Nestle and the lifelong associations they carry to realise the importance of the issue. Furthermore the recent product recalls from Mattel prove that businesses in any industry are susceptible to a potential media crisis." Additionally only 32 per cent of UK business are prepared for a loss of key suppliers and 34 per cent for a loss of key customers, compared with global average of 43 per cent and 47 per cent in the EU. "It is worrying that UK businesses appear to be overlooking these fundamental business risk areas," Stewart warned. "While not as high profile or dramatic as some events, the sudden or unexpected loss of key personnel or a supplier can have a devastating impact on a business." The Grant Thornton International Business Report is an international survey of the opinions of medium to large privately held businesses in 32 countries covering 7,200 respondents. About 600 businesses in the UK were surveyed as part of the report. The research was conducted by Experian Business Strategies Limited and Harris Interactive.