Australasians add backing to international risk qualification but are divided over feasibility – Australasia

There was a consensus that as a minimum, local recognition is needed in territories around the world to put risk management on the same footing as other disciplines such as audit and accountancy and keep pace with the risk profession’s growing status. Many said that the Risk Management Institution of Australasia’s (RMIA) Certified Practicing Risk Manager (CPRM) accreditation fulfils this role in Australia and could be used as the basis for a worldwide scheme, but there were some doubting voices. Bryan Whitefield, Director at consultancy firm Risk Management Partners, told Commercial Risk Europe that the creation of a globally recognised formal risk management qualification would help convince senior management of the value of the function and raise the influence of the risk manager.hideOther professionals such as accountants and actuaries have had such a scheme in place for years and others, including actuaries, are going down the same path, he said. “And the same should happen with risk one day—it is fundamentally too important to business for it not to happen,” said Mr Whitefield. “Local certification is a minimum but we should look beyond that.” Rob Maurich, Chief Risk Officer at grain producer and logistics firm CBH Group, believes that ultimately global accreditation will become a necessity for the risk profession. “Ultimately that is where we will have to end up. There is an increasing use of quantification methods within risk management, as we move away from more simplistic qualitative methods, and I see that formal qualification is needed to fully encompass and drive that trend. So much the same as internal auditors have their Certified Internal Auditor (CIA) qualification internationally, I think there is an evolving trend that will encompass risk management,” he said. “Now we have got to a certain level of maturity some kind of formalisation is the next step, at the very minimum at country level but also worldwide. And that will help to get the attention and buy in of top management,” added the CRO. According to Tracy Destree, Manager of Enterprise Risk at INPEX, the oil and gas exploration and production company, the need for formal qualifications grows as the risk profession gains recognition. Risk management competency frameworks are central to, and essential for, developing risk capability, and attainment and management of a professional qualification is central to that framework, she said. “Risk managers must be able to demonstrate their competencies.” “We need to promote these professional standards, and an international standard in risk management and recognising the competencies of a professional at this level is the logical next step,” added Ms Destree. Robert Emery, Head of Group Risk & Compliance at Bupa Australia, who was expressing his personal view rather than that of his employer, agreed with his fellow participants about the merits of a global scheme. He said a globally recognised and portable qualification is theoretically achievable because risk methodology is constant, citing the ISO 31000, and all that then differs around the world are the local legislative, cultural and ethical landscapes. Marc Turner, Former Chair of New South Wales' (NSW) Public Sector Risk Management Association (PSRMA) and Manager of Corporate Risk Unit, Governance and Legal Office at Fire and Rescue NSW, said formal accreditation is desirable because it raises the profile and skill levels of risk managers. “People have managed risk for time immemorial and the profession is not looking to provide anything new on a conceptual or practical basis—it is simply promoting evidence-based decision-making and rigour in thinking. Many organisations are not entirely comfortable with evidence-based decision-making—particularly in the public sector I must say—so more formal training can only help,” he said. He argued that formalised tertiary qualifications challenge students’ way of thinking and encourages them to apply risk principles in unfamiliar environments. “This broadens one’s understanding and makes, in my opinion, a better, more well-rounded risk professional. The value that you then bring to your CEO,” he added. “I don’t think a global qualification is impossible. The CPRM is recognised elsewhere in the world.” The RMIA’s Certified Practicing Risk Manager (CPRM) accreditation is aimed at those that manage risk at a strategic level and gives them professional recognition as a licensed risk practitioner. The institution also offers a Certified Risk Management Technician (CRMT) accreditation aimed at operationally-focused managers of risk and/or specialist risk practitioners starting the transition to more senior roles. Although there was some criticism of the CPRM amongst the survey participants, it seems it has helped with formal recognition of the risk profession in Australia. At the very least it is seen as an important first step. Mr Whitefield claimed that due to a range of issues the CPRM has not had the traction that it should, but he conceded that in principal it was the right move and similar schemes are the path to follow nationally and globally. As Kevin Knight, President of the Federation of Asia Pacific and African Risk Management Organisations (FAPARMO) and chair of the ISO working group that produced the ISO 31000, pointed out on formal qualifications in general and the CPRM in particular: “If risk management practitioners are to be accepted as an integral member of the management team they need to be able to show a recognised level of professional knowledge and skills. The need for a recognised qualification similar to the CPA of accountants or the CIA of the audits was addressed in Australia back in 2000 with the development of the CPRM designation.” But the issue of whether the CPRM can and should form the basis of a global accreditation, or whether the global profession will be able to agree on such a scheme is much debated. Grant Whitehorn, Enterprise Risk Manager, Vodafone Hutchison Australia and President of the Risk Management Institution of Australasia (RMIA), believes a global risk management accreditation or qualification is some way off. “Put it this way, as a holy grail it would be wonderful to have an international accreditation but in practice to actually get there seems fanciful,” he said. “To have one global certification or qualification looks difficult. It took us six years to get international agreement on ISO 31000 so can you image how long it would take for a qualification,” he added. “I think it’s going to be an evolution rather than a revolution. RMIA already has its CPRM and CRMT accreditation programmes, RIMS have their own and so do some others. But I assume that if Ferma ends up developing their own accreditation programme then there will probably be a time ten to fifteen years down the track when we can all come together and say let’s have an international version. Ifrima should play a proactive role to facilitate this,” he continued. Ferma is currently working on delivering a pan-European certification or accreditation scheme. Kicked off last year, the project aims to deliver a professional qualification that can augment existing national qualifications and provide individual risk managers with a proof of professional competence and practical experience that is recognised across Europe. Mr Whitehorn encouraged the European federation not to reinvent the wheel and rather draw on the work already undertaken in Australia. Sean O’Brien, Project Risk & Opportunity Manager, ODG Haden—Novo Rail Alliance, is less convinced than some of his peers about the likelihood of a single global risk management recognition. For him it is a case of too many cooks in the kitchen. “Here in Australia we have the RMIA CPRM, the IRM has got qualifications and so have various other providers such is PMI—so in the risk space it is very busy. So getting someone to coordinate all that will be the problem,” he said. “Also, internal auditors think they do risk, compliance people and safety people say they do risk, and the list goes on. So it is such a busy space that yes it would be useful and beneficial, but then you will inevitably have the specialisation streams that would dilute the qualification. And there would likely be biases within any qualification. Risk is still seen as a very financially-orientated function,” he added.

Australasians add backing to international risk qualification but are divided over feasibility – Australasia

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