Bruce Love looks at the security risk facing some family businesses and looks at the firms that offer some credible solutions
At an intersection in the wealthy suburbs of Usaquén, northern Bogotá, all the traffic lights inexplicably turn red, creating a clear path for the motorcade of black SUVs to negotiate the junction at pace. The fleet careers across the tree-lined boulevard and circles into the stately courtyard of an exclusive prep school.
A detail of bodyguards in slick double-breasted suits and dark glasses exit the front and rear cars, scouting the immediate vicinity and providing a zone of safety as the passenger from the central SUV skips out of the car and crosses the playground, ready to start the first day at her new school.
Meanwhile, in the Kremlin Suite at the Hotel Baltschug Kempinski Moscow, an American chief executive has set up his command centre, camped out during sensitive M&A discussions with a Russian oil conglomerate. He hunches over the dossier in his hands, listening intently each time his close advisors whisper cautiously into his ear.
The view over Red Square and the Moskva River remains ignored as he carefully prepares to host talks with his opposite number. A team of ex-military contractors are busy sweeping the room for clandestine surveillance technology – bugs, hidden cameras and transmitters – and the chief executive has been instructed to remain silent until the room has been "sanitised".
The risks of kidnap or corporate espionage are real, not only in emerging markets but more frequently at home as well. Now more than ever, wealthy families are taking measures to increase their personal security but often their reactions are excessive to the threat or even counterproductive. Nick Henderson, a director of Guardian GS, says sometimes the seemingly obvious reactions to security and risk problems may not be the best.
For instance, if you're worried about being taped in a foreign hotel room, rather than have the room swept, change rooms – or even hotels – at the very last minute. If you're worried about your children being kidnapped on the way to school, drawing attention to yourself in a three-car convoy may not be the most appropriate response. But even then, these are reactionary tactics to perceived immediate threats, rather than long-term measures.
Guardian GS is an international consultancy offering bespoke and confidential advice and promoting holistic risk mitigation over simple security plans. Based in London but consulting for international families around the globe, the company's clients range from members of royal families to business family dynasties and individual executives.
"All too often security and risk assessment services are piecemeal and not looking at the broader threat or situation," Henderson says. He believes it's important for families to look at their entire situation rather than compartmentalising fears or threats. A lot of Henderson's work is putting together risk profiles for families, covering a wide variety of threats.
Depending on your business background and personal experience, the term risk assessment can have a wide variety of meaning and connotations. The threat of theft and physical harm to assets, person and family feature highly in many people's concerns, and is more often than not the principal reason for taking on physical and electronic security.
But security guards, bodyguards, electronic surveillance and alarm systems are only a small part of the solution according to Henderson, who says it is important to consider the sources of potential risks and to implement plans to mitigate them. He advocates greater transparency and long-term relationships with your risk management consultants.
"You need to cast the net wider if you are to come up with an effective and comprehensive strategy," he says. "People's lives are interwoven – there is often no distinct split between business, family and personal. Sometimes there are various marriages that have impact, other members of the family can impact on the business and business can impact on the family."
Henderson says the firm analyses risk in a practical manner and does not "sell product" to clients, preferring to take a top-down, strategic view of a client's needs and then work in partnership with local specialist suppliers.
A full security team
When conducting a risk assessment, Guardian GS utilises its in-house team of police, military, financial and public relations professionals to paint a unique picture of potential risks. Using a system of intelligence modelling, Henderson and his team run the gauntlet of would-be threats – analysing reputation and media coverage, domestic and executive staff, potential litigation, personal situations, the economic climate of markets where the family does business, IT systems, proximity to emergency services for family residences, as well as the traditional perimeter and manpower security assessments.
"People's lives are complex and should not be treated as two-dimensional," he says, adding that the entire process is handled with extreme sensitivity and confidentiality.
Often, he says there is a discrepancy between perceived wishes of a client and actual needs: "In such cases we believe it's best to find a movable compromise. The underlying ethos should be that it doesn't impact on the business, the family, or the individual."
Henderson says that often security is a "distress purchase" where companies are engaged only when a threat is immediate. But trying to implement a plan at the eleventh hour can often cause more friction than good. "It should be viewed more like an insurance policy," he says.
Charles Hamilton Stubber, director of private risk management at Aon agrees. "The middle of a crisis is a very poor learning environment for crisis management," he says. "Once you are in a crisis you are in a damage limitation environment."
Hamilton Stubber says there are predictable decisions that can be made to mitigate potential crises. He says that for unpredictable events to be dealt with effectively, planning and process are of the utmost importance. Guidelines need to be developed and exposures need to be assessed.
"The most cost-effective form of insurance you might find is proactive precursor planning," he says. Once plans and strategies are in place, Hamilton Stubber says these should be tested and reviewed formally on an annual basis: "Precursor planning and readiness allows you to deal with critical decisions when they arise."
Families should also identify key individuals with key skills for critical roles – such as media training, IT, business contingency, extortion, kidnap and ransom, and medical, to name just a few. He recommends the use of a risk management service and says key individuals could be outside consultants, family office members, or even experienced members of the family.
From both Henderson and Hamilton Stubber, the message is clear: Risk mitigation is not just about physical security. It comprises every facet of the family's life. Forward planning and preparedness are key. As Hamilton Stubber succinctly puts it: "There is a minimum that can be done to reduce a threat, but a lot can be done to minimise vulnerability."