Conference hears call for highest level involvement

Three steps to successful risk management Risk leaders were given three ‘simple’ steps to success at the IRM’s Risk Leaders’ Conference—manage the past, the present and the future. Michael Parker, Chairman at Croydon Health Services NHS Trust, member of the health panel at the Association of Chartered Certified Accountants and an honorary life member of IRM, told delegates that this was ‘all he asked’ of risk leaders. Answering this call would enable them to establish risk management across their organisations and for the profession to gain the respect it deserves, he said.hide“There are just simple things that I ask of our risk leaders: managing the past, managing the present, and managing the future. That’s all I ask. I expect risk leaders to engage in all of this on a regular basis,” he explained. Noting how difficult this task is, however, Mr Parker encouraged risk professionals to deploy all the tactics available to take risk to board level and improve their own performance. “I will happily steal elements from other sectors—unashamedly,” he said. “I don’t care about policies, procedures or protocols as long as you get the right outcomes,” he added. Mr Parker compared risk professionals to [Superman] Clark Kent and said that the best risk leaders saved business from disaster, protected reputations and made board members look good. Lack of business ethics killing Japan Former Olympus CEO and president Michael Woodford, who famously blew the whistle on fraudulent practices at the electronic goods manufacturer, claimed that corporate Japan is ‘dying’ as he lamented the absence of ethics in the country. Mr Woodford, a keynote speaker at the Institute of Risk Management (IRM) event, told delegates: “Japan is dying…Japan is broken, unfortunately. And it’s these old men in dark suits and all they care about is the club. They don’t care about right or wrong, just their own selfish interests. It’s terrible.” Delegates heard how Mr Woodford discovered a staggering $1.7bn cover-up of losses at Olympus dating back to the 1990s. He was subsequently dismissed on 14 October, 2011 after he repeatedly confronted senior executives about the scandal. “In Japan I’m a very controversial figure. Much of the establishment despises me,” Mr Woodford said. Since Olympus agreed to pay him a significant amount in compensation, reported to be around £10m, Mr Woodford has reinvented himself as a speaker on ethics and morality. He recently published his novel—Exposure: inside the Olympus scandal—and is in talks with Hollywood about turning his story into a blockbuster movie. Cyber security not taken seriously warns UK government secretary Organisations are failing to treat cyber security as seriously as physical security, delegates at the IRM’s latest gathering were told. Martin Donnelly, the UK’s Permanent Secretary of State for the Department of Business, Innovation and Skills, told the leading risk figures that cyber security ‘is just as important now as traditional security’ but that many firms have failed to act accordingly. He said often ‘companies who understand physical security management have a proportionate approach to physical security—their alarms and their locks—but just don’t bother about the cyber element, or don’t update. And what was all right two years ago [for cyber security] certainly won’t be all right now. What was okay six months ago is worth another look’. No organisation is too large or small to suffer from events such as the loss of intellectual property, the shutting down of vital systems or reputational damage, Mr Donnelly warned. “The number of significant attacks on large organisations has doubled in the last three years. And I can tell you that there is no business that is too small for the attention of hackers. And many of them make a very good living from the smaller end of the market,” he said. Mr Donnelly called on risk professionals to take the issue to senior executives and away from the ‘IT ghetto’. He said the UK government would be encouraging larger companies to avoid working with suppliers who are unable to demonstrate they are taking the issue seriously. But he concluded by warning that government cannot act alone, adding: “We have got to avoid a situation where industry thinks that cyber is a risk to be managed by government any more than any business would assume that crime is being looked after by the police so you don’t need to worry about it.” Risk professionals must play head chef when measuring risk appetite Risk professionals should play the role of a chef when determining their organisation’s risk appetite, Alex Hindson, Institute of Risk Management (IRM) director and head of Group Risk said last month. Speaking at the IRM’s Risk Leaders’ Conference in London, Mr Hindson said it was the role of the modern risk professional to use the tools and methods outlined in the institute’s recent risk culture guidance to achieve the best outcome. “This [IRM guidance] is a great list of ingredients but you need a good cook and that is the role of a risk professional. There is no promise you will get a great meal but with some skill and attention this is what you need,” he told the audience of over 100 risk professionals. However, Mr Hindson conceded that there is no ‘silver bullet’ and that part of the challenge for risk leaders is to determine which approach will best suit their organisation. Mr Hindson also revealed that IRM’s next thought leadership work—following on from last year’s work on risk appetite and this year’s risk culture focus—will consider risk in the extended enterprise.

Conference hears call for highest level involvement

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