Preparedness uneven as Sri Lankan corporates face rising global shocks

By Shannine Daniel

The Sri Lankan corporates are better prepared for external shocks than they were during the 2022 crisis but significant gaps remain, particularly in scenario planning and deep risk analysis, Association of Chartered Certified Accountants (ACCA) Chairman Chaaminda Kumarasiri said.

The key challenge he said is not disruption itself but the inability to respond when opportunities emerge.

He noted that while the crisis management capabilities have improved in recent years, the focus must now shift towards building resilience strong enough to withstand shocks before attempting to capitalise on them.

“Preparedness is still somewhat uneven, with large organisations such as the banks, multinationals and conglomerates having their own methodologies, policies and governance frameworks driven by the regulators,” Kumarasiri said at a webinar organised by the International Chamber of Commerce Sri Lanka and ACCA.

“But the mid-sized organisations and small and medium enterprises (SMEs) are still not very keen on looking at risk as a strategic lever because they mostly treat it as a compliance, tick-the-box exercise. That’s where we need to be very careful,” he added, noting that this leaves the mid-sized firms and SMEs particularly vulnerable to the external disruptions and exposes weaknesses in planning and response mechanisms.

However, Kumarasiri pointed out that Sri Lanka has made notable progress on the reporting front, with enhanced governance frameworks, including strengthened stock exchange requirements and adoption of S1 and S2 sustainability-related disclosures, improving transparency.

He stressed that the issue is no longer whether risk is disclosed but how rigorously it is assessed.

“The weakness is not about a missing section in the annual report on risk. It’s about the depth of the stress testing that we actually do, especially in terms of foreign exchange exposure, supply chain risk and geopolitical issues,” Kumarasiri said. 

He added that very few companies actively assess the potential impact of the scenarios such as oil price spikes, shipping disruptions, tourism volatility and working capital pressures. He also noted that the ongoing Middle East crisis underscores the scale of Sri Lanka’s exposure, as the country’s economic links to the region span exports, tourism, oil imports and remittances.

“If you look at the remittances, Sri Lanka receives more than US $ 8 billion annually, which is around 8 percent of GDP. Nearly 70 percent of these remittances originate from the Middle East.” 

In 2025 alone, 80 percent of foreign employment departures in the first nine months were to the region.

Kumarasiri urged the finance professionals to move beyond the retrospective reporting towards forward-looking modelling. He called for scenario planning to become a continuous process, integrated into regular management dashboards rather than treated as an annual exercise.

“I would say, the Sri Lankan corporates have learned crisis management based on what we have experienced in the past. But what is now important is to institutionalise crisis anticipation,” he said.