Leading by example

“I would venture to say that there aren’t any areas that stand out where South Africa is lagging in risk management practices compared to the rest of the world. Just look at how we have been able to weather the impact of the global crisis we are all facing. This speaks highly of our strong risk management culture,” Hendrik Thessner [pictured, right], President of the Institute of Risk Management South Africa (IRMSA), told CRA as he prepared to host this week’s annual conference in Midrand, north of Johannesburg. In light of these uncertain times, the need for sound risk management practices and skilled risk managers has never been higher. Companies in Africa and worldwide have realised they cannot be sustainable if they don’t have a strong risk culture and disciplined risk management function within their business, Mr Thessner said. “The events of the last couple of years have changed the role that risk management plays in business; corporates are beginning to realise the importance of risk management and how qualified risk professionals within a business are better equipped to face, manage and mitigate risk,” he explained. Meanwhile, corporates in South Africa are beginning to appreciate the benefits of being a part of IRMSA, which in June this year became the solely registered body for risk management in South Africa with the South African Qualification Authority (SAQA). Established in 2003, Johannesburg-based IRMSA is dedicated to the advancement of the risk management profession and its accreditation, through research, promotion, education, training and guidance. Its members include corporations from both the private and public sector. The ability of IRMSA to accredit risk managers is raising the levels of excellence and professionalism in the South African industry. And as part of IRMSA, companies are benefiting from a more consistent approach to risk management, transferring skills and generally sharing information and best practices, according to Mr Thessner. “Companies now have the peace of mind of having an accredited risk professional within their organisation, which brings them a host of benefits including how they manage their risk as well as the sustainability of the business,” he says. As South Africa’s sole professional risk body, IRMSA has become the port of call for risk managers in South Africa that are facing challenges and dealing with the upscaling of staff, particularly as the risk management function has become a more senior and influential position. “Access to IRMSA’s network has assisted companies that recognise the importance of having the ‘right tone at the top’ in their risk management function,” added Mr Thessner.hideTraining and development As part of its strategy for the 2011–2014 period, IRMSA aims to be the risk management institute of choice for risk professionals and practitioners in southern Africa, with education a primary function. The institute’s training and development arm currently offers five accredited risk framework courses, which are conducted by various training bodies in the country. “However, our ultimate aim is to conduct these training and development courses internally. In fact, we started our first internal risk management framework course this year which has been very successful,” said Mr Thessner. “We are now busy with the development and completion of two new risk management qualifications which we are very excited about. We have found university degrees in risk management only go so far. When it comes to the practical side there is a lot of demand for these courses, specifically on risk, and being the only recognised professional body we deem it our responsibility to develop this area,” he explained. IRMSA hopes to complete the above qualifications, as well as a new risk curriculum, by the beginning of 2013. Meanwhile, Mr Thessner revealed that IRMSA is also involved with the development of an occupational qualification through the Qualifications Council of Trade and Occupation (QCTO). “This will not replace university degrees, but provide the risk professional with an alternative to a traditional university qualification in risk management which opens a new career pathway,” he explained. Adding to its arsenal of functions, IRMSA has applied through QCTO to be the assessment quality partner for this occupational qualification, which means it will be able to maintain a register of assessors and moderators, manage external assessments and certify applicants. “This means anyone who partakes in risk training in South Africa will have to be accredited through IRMSA, once again further increasing the footprint and value we add to the risk management community,” said Mr Thessner. Current risk environment As part of its efforts in training the risk management sphere, IRMSA, along with its ‘Risk Manager of the Year’ in 2002 and 2009, Gert Cruywagen, founded the Cruywagen-IRMSA Risk Foundation to facilitate student internships and holds regular ‘Risk Laboratories’—topical workshops given by professional speakers. “Feedback from our members from recent risk labs finds that South African risk professionals are managing risks quite well; the success of which is down to proactive risk identification. Monitoring risks is also critical. Therefore, effective risk management committees within corporates are essential to mitigate and minimise the impact they can have,” Mr Thessner pointed out. However, there are a few challenges that affect not only South African risk managers, but corporates globally. Information security risk is one that is really coming to the forefront for risk professionals, according to Mr Thessner. “Cybercrime around the world has always been a major issue. While another emerging risk is social media—the complexity and intricacies around this are currently being dealt with. These are all risks South African risk managers are dealing with; ensuring our companies and risk professionals are prepared in terms of how to mitigate these risks,” he explained. Meanwhile, the quantification of risk poses another challenge in terms of building scenarios and capital requirements for operational risk. “Besides that, I must say we are quite fortunate in South Africa in that we can say we have very strong risk cultures across the board. Risk management is becoming quite a parcel of the business, to ensure it is sustainable going forward,” added the risk manager. These common global challenges are an area where IRMSA can look towards its peers outside of South Africa to tap into their skill and knowledge, and building solid relationships with other institutes and associations both locally and internationally is another objective for IRMSA’s 2011–2014 strategy, said Mr Thessner. One of the main topics that will be discussed during IRMSA’s annual strategy session in January 2012 will be benchmarking. Locally, IRMSA works closely with the Compliance Institute of South Africa and various audit and chartered accountant associations. This time, IRMSA will draw on the international experience of the London-based Institute of Risk Management (IRM)—the world’s leading enterprise-wide risk education institute. “We are in discussion with the IRM, who will be visiting us soon, on benchmarking risk with a view to commence benchmarking in South Africa against the global environment, and specifically other corporates from a global point of view,” explained Mr Thessner. But overall, he argued, South African risk managers are well placed, and in certain instances, ahead when it comes to risk management practices, according to feedback from students on Cruywagen-IRMSA Risk Foundation placements in the US and Switzerland. “Areas such as risk management frameworks, enterprise risk management committees and reporting risk identification are areas where South Africa compares very favourably,” added Mr Thessner. Springboard This message is something that IRMSA intends to take across the border into the rest of Africa; risk management institutes in the rest of Sub Saharan Africa have yet to catch up with the activity generating from southern Africa, and the call for risk management skills is high. “This really is an opportunity for IRMSA to expand into these environments and take our knowledge to the rest of Africa,” said Mr Thessner. IRMSA’s membership base already includes risk professionals from the rest of Africa that are kept up to date with topical issues via monthly newsletters, conferences, monthly breakfast meetings and risk labs. But the organisation is taking a step further into Africa and is in discussions to establish its first branch in Namibia, a topic that will be discussed further during IRMSA’s annual strategic session in January (see front page news). “That will be our first major objective that we would like to achieve in expanding our footprint outside of South Africa. It’s still in the early stages of discussion, but there is a lot of demand for risk management skills up in Africa,” revealed Mr Thessner. Moving ‘up’ further into Africa is not without its challenges in terms of the skills needed and the infrastructure IRMSA will need to set up. However, Namibia makes perfect sense for its first step because of its close proximity, stable economy and regulatory environment. It is also within the same Common Monetary Area as South Africa, which makes it a good springboard to venture deeper into the rest of the continent.

Leading by example

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