Crisis Value Erosion Index
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A crisis can sink your business and damage reputations.
Are you prepared?
Our latest research of some of the biggest crises from around the world shows that a crisis can wipeout up to 50% of a company's value. In some instances, share prices can take years to recover. Some never do.
Our third Crisis Value Erosion Index report provides hard evidence of the financial impacts of a crisis. Chat to us if you want to understand how best to prepare for and respond to a crisis.
Read the full report here:
2024 Key Insights
- 80% of companies struck by a crisis experienced a drop in share price (12% on average) and a median earnings per share drop of 100%
- Share prices took, on average, 60 days to recover. Some never did
- The mining and materials sector experienced the highest average share price drop (21.9%) followed by retail (18.5%) and then travel (17.5%)
- Crises with casualties experienced the highest average share price drop (24.4%) followed by environmental damage (23.4%)
- The deeper the crisis, the more likely executive resignations and compensation payouts followed.
The research considered six metrics relating to the financial performance of the organisation following a crisis:
| Share price drop |  |
Days to recovery of share price |  |
Days for effective recovery of share price |  |
| Earnings per share (EPS) drop |  |
Days to recovery of EPS |
|
Days for effective recovery of EPS |  |
Preparing for a Crisis
The financial impacts speak for themselves and highlight the importance of preparation and simulations.
Time and again we see how companies that are crisis ready, mitigate many of the adverse outcomes of a crisis. Typically, they also recover fastest on all financial metrics.
SenateSHJ works with clients across Australia and New Zealand to build and protect their reputations including crisis preparedness and simulations. Email us at [email protected] to learn more about how we can work with your business.