Risk Management

Contingency Planning

One Year Later
Alix StuartSeptember 1, 2002

For the past year, New York Board of Trade (NYBOT) CFO Walter Hines has been grateful for a trading floor that is less than half the size his company had 13 months ago and a 50 percent longer commute from his home. Grateful, because the exchange’s original trading floor and offices, along with all of its paper records, were decimated in last year’s September 11 terrorist attacks.

Without the makeshift trading floor, built as a temporary backup facility after the 1993 World Trade Center bombing, the exchange operations could easily have fallen into disrepair as Hines rebuilt his books from scratch, sorted out insurance claims, and looked for a permanent space. Instead, NYBOT has thrived despite the constraints, expanding the facility twice to allow for longer trading cycles.

As the anniversary of last year’s attacks approaches, U.S. businesses are still sorting through the event’s lasting effects, both physical and psychological. They are putting the finishing touches on contingency plans, rethinking security measures, and planning for ways to commemorate the tragedy.

While few could have foreseen the extent of the damage wrought, Gartner estimates that fewer than 25 percent of large businesses had invested in comprehensive business-continuity planning as of the start of 2002, though that number is expected to rise to 70 percent by 2005.

Disaster recovery plans, ranging from securing alternative physical facilities to backup credit facilities, “are taking much more of a front seat,” says Glenn Eckert of Moody’s Investors Service. “They’re something we’re actively discussing with the companies we cover.”

New defenses at NYBOT include a third backup center and its first chief information security officer. But, says Hines, “the fact that things run smoothly today in our backup facilities doesn’t mean we’re back to normal.” He knows some employees are nervous about returning when trading shifts downtown to the New York Mercantile Exchange floor in mid-2003. “Things might never be back to normal.” –Alix Nyberg