Looking forward to 2007, the COMPAS panel of CEOs and business leaders was asked to forecast the probabilities of certain kinds of risks to business and assess the degree to which businesses are prepared for such risks.

Bad products and services top the list with a 40% probability of taking place for the average corporation in Canada. This is followed by the probability of fraud and bad PR. Employee violence and terrorist events are seen as least likely and yet are given probability estimates well above zero.

Companies are seen as highly prepared for fire, an unlikely crisis in their view, as well as three more likely crises, bad products, law suits and fraud. Though businesses are seen as better prepared to deal with fraud than with a majority of other expected crises, they are not seen as especially well prepared for fraud.

When crisis probabilities are compared with crisis preparedness, the data suggest that companies need to invest more in preparing themselves for dealing with bad products, bad PR, and fraud.

These are the principal findings from the weekly business web-survey conducted by COMPAS for the Financial Post under sponsorship of BDO Dunwoody LLP.

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