Risk managers need to prepare for a new world

12 Oct 2020 4:00 pm

Risk managers need to prepare for a new world

Echoing the famous musician, Bryan Adams, “It’s a new world, it’s a new start,” risk experts on the International Think Tank in August shared their wisdom and learnings around the response to COVID-19 and the future, aptly reframing what has become commonly known as the “New Normal” to the “Next Normal.”

Sponsored by legal and compliance technology experts, LexisNexis South Africa and organised by Risk Management South Africa (IRMSA) the international panel on the webinar shared great insights and tools with risk managers, key to forging the way forward for economic recovery in the public and private sectors, as well as guidelines for professional growth and advancement during and post COVID-19.

The message from the speakers was clear: Risk managers have a vital role to play in whether businesses survive or thrive. Those risk managers who were able to provide their organisation with clarity of message, basing their findings on facts and helping make calculated and measured decisions, would be considered valuable role players in the future, possibly securing a seat at the C-suite table.

Changing perceptions

Robert Cartwright JR, Division Manager: Environmental, Health, Safety and Sustainability Bridgestone Americas, said that changing the perception that risk managers were merely naysayers and that their directives cost the business money was fundamental for this repositioning. “Risk managers need to know the culture of the organisation they work for, they need to collaborate with all departments and not operate in a silo, making sure that they know the business and are known to the business, showcasing the value the risk management function has in profit retention.” This, he says, needed to be done by showing clear examples of where risk management efforts resulted in direct benefit to the bottom line.

“Risk management has been too focused on process compliance at the expense of risk agility and business reality,” said Franck Baron, International SOS (France). “Risk managers need to be ready to reset, do a full restore and revamp or update their competencies and conduct a holistic scan of risks. COVID-19 has been a wake-up call to start building the resilient organisation of the future.”

Navigating COVID-19

United Kingdom based Julia Graham, the Deputy CEO and Technical Director of Armic, with four decades experience in the risk field, shared key factors that had enabled organisations to come out of the various international lockdowns intact. These organisations, she said, had prioritised people, communication and determined what mattered most to their business. They had adapted to the challenges with agility and had effective leadership.

Interestingly, while the world seems set on the dialogue that the new normal will mean more people working from home, Graham stated that a recent survey showed that only five percent of workers actually want to work from home long term. “The inability to unplug, loneliness and distractions of working from home were considered major negatives,” she said. These are risk factors that will need to be considered in future proofing.

CEO of Rims, the world’s largest risk management community based in the United States, Mary Roth stressed the importance of a collaborative approach to risk management. “When leadership disagrees, it sends a confusing message to the public,” she said likening the COVID-19 response in the USA to corporate risk management.

“COVID-19 has impacted the entire eco-system. As a business, RIMS made the far-reaching call to cancel the globally recognised RIMS 2020 event. It was the hardest decision I have had to make in 35 years of being at RIMS. We had to shift from short term objectives (cancelling vendors, accommodation, venues, catering etc) to a long term strategy to ensure that we were able to move forward, generate revenue and continue to deliver value to members. This involved reassessment of our business models and shifting gears.”

Rethinking required

Risk managers, Roth said, need to rethink framework and methodologies, always looking for ways to improve themselves. This is essential to organisational resiliency and would hopefully result in more resources being allocated to risk management and more invites to C-suite and Board discussions.

Risk managers needed to ready businesses to ‘shift processes back’ post COVID-19, while acknowledging and highlighting that not all industries – and indeed not all departments – would recover at the same pace. Being in sync with human resources, retraining and redeploying personnel to avoid losing key players, would enable operations to shift back, or shift to the next normal more easily. “Avoiding hard-to-reverse outcomes to prevent regret and ensure that what follows is designed and driven to be better needed to be a priority,” Graham said.

“Our ability to understand what the pain points for our businesses are is important. The decisions we help make and influence will guide our realities of tomorrow,” said Berenice Francis, Corporate Affairs Risk Executive, Motus South Africa and immediate past president of IRMSA.  “We cannot just have strategic intent - we need to follow through the different levels of execution.”

“As risk officers or as a leader in business we are paid, not just to think things through but to execute and align. As professionals, we need to use our theory and experience as our foundation, focus on the data and tech, and then apply. It is getting a lot harder to do business. A lot more competitive. People are more suspicious, and they question a lot more,” Francis said.

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