Risk management boosted by the pandemic?

Nordic risk managers taking part in our Risk Frontiers Europe survey are divided on whether risk management has been boosted by the Covid-19 crisis, although this is partly explained by the fact risk management was already well established at Nordic firms A survey of more than 200 Swedish risk and audit professionals found that Covid-19 has made less difference to the role of risk management at their companies than you might expect, with just 38.1% saying the function now has a higher profile than before. And only 28.6% that risk managers have a higher profile within their organisation. We followed these results up with in-depth discussions with other Nordic risk managers and got a similarly mixed picture. Lene Ritz, chief risk manager at Energinet in Denmark, believes that while insurance may have come to the fore during the pandemic, wider risk management and entreprise risk management are sadly not now higher on the agenda. “It [the pandemic] might have put insurance higher on the agenda, as the broader part of the organisation now realises that the ‘devil lies in the detail’ – the written words with small letters in the policy. However, this situation contains a dilemma. As an insurance specialist, you would like the subject high on the agenda. But if the main driver for realising the value from enterprise risk management is taken more out of the equation through buying insurance, then while it is a moment of fame for insurance, it is also a downgrading for enterprise risk management,” she said. Another Danish risk manager, who preferred to remain anonymous, felt Covid-19 has provided a shot in the arm for risk management. “For us, it has fuelled a general and ongoing maturity process in risk awareness at corporates as Covid-19 impacts have been largely manageable,” he explained. He added that the pandemic has taught companies there must be a greater focus on resilience and business continuity planning. Dr Ulrich Adamheit, board member of Swedish risk management association Swerma and head of business risk at Vattenfall AB, noted that risk management was already high on the agenda of Swedish firms before Covid-19 struck. “Fortunately, no boost was necessary to risk management because it was already highly valued ahead of the pandemic and also pandemics had been part of the risk picture before,” he said. Alessandro Ingrao, risk manager at Holmen, believes that both risk management and risk managers have fared well through the pandemic. But he pointed out that risk management should already have been high on the agenda, with big risks such as a pandemic flagged internally. “You should clearly expect the unexpected,” he stressed. Jennie Elisabeth Wallin, director and head of enterprise risk management at KPMG in Sweden, said the pandemic has boosted business continuity and crisis management because many organisations had limited established processes and routines in place before Covid-19. She believes the crisis should have taught companies to expect the unexpected. “Risks you should have on your radar are not only those that you have experienced and they cannot be based purely on history,” she said. On the upside, digital acceleration has been key to many organisations’ survival during the pandemic and provides an opportunity going forward for workforces to become more agile and reactive, continued Ms Wallin. Another Danish risk manager that wanted to remain anonymous added that Covid-19 should have focused minds on business continuity. “We have managed the supply chain situation well during Covid-19, however having better preparedness when situations like this happen would in my opinion lower the cost for a company following such an event,” he said.

Risk management boosted by the pandemic?

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