Risk managers must react fast to avoid becoming business disablers in tech age

If risk managers do not reinvent their role and skills fast enough in the digital age, they risk becoming business disablers, delegates at Airmic’s ERM Forum were warned. Risk managers will simply have to learn tech language and terminology if they want to remain relevant, experts added at the event in London. A panel debate on challenges facing risk professionals in the digital age, held at the forum, was set against the backdrop of Airmic’s recent Roads to Revolution report. It considers the challenges that boards, business leaders and risk managers face to succeed in this new world. Published with Cass London Business School, the report builds upon the five principles of resilience in Airmic’s previous Roads to Resilience report, which are: exceptional risk radars; building strong relationships; having respectful and respected leaders; having an ability for rapid response; and diverse resources. Roads to Revolution has produced three new principles needed in the digital age, bringing the total number in Airmic’s resilience model to eight. These new principles are: redesigning processes to embrace new technologies and encourage innovation; retaining stakeholders during digital transformation by analysing big data; and reinventing purpose by opportunity awareness, commitment and capabilities. Airmic’s deputy CEO and technical director Julia Graham said reinvention of the risk manager role has to go hand in hand with the reinvention of organisations, and must reflect the scope and scale of such transformation. Those that fail to keep up with the pace of change in the digital age may hold back their organisations, she suggested. “That is really important for risk professionals. If you don’t move with the pace of the repurposing of your organisations, risk management could end up being a business disabler because you may be producing frameworks that are not up to speed with what your organisations want to do,” Ms Graham told delegates. John Dowie, a partner at KPMG, agreed it is vital that risk managers are not barriers to the progress offered by technology, and instead enable transformation. But he said to achieve this, the profession needs to find ways “to change and balance the need for speed and agility with risk management and control”. He said KPMG strongly believes the risk management role is fundamentally going to change. The future requires more agile risk functions and new skills for risk practitioners, including understanding and translating tech jargon, he continued. “The risk manager will need to demystify emerging tech. I am sorry, but you will have to get with the language and terminology to help your businesses understand the risks around emerging and emerged tech. It is hard to envisage a risk manager of the future who isn’t going to be steeped in technology, because its pervasive,” said Mr Dowie. He said KPMG thinks the next-generation risk function will understand risk better and appreciate how risks are interconnected, as well as being more predictive and proactive. “Traditional risk methods still have value but they will need to be enhanced. The risk manager of the future will need to be more adaptive and more collaborative,” said Mr Dowie. “With that, we see changes in the role, profile and skillset. We also see changes in operating and sourcing models. Underpinning all of that is an agile risk framework that should be centred around technology, supported by data analytics and continuous monitoring,” he added. He stressed that none of this is achievable without the backing of, and engagement with, the board. Fiona Davidge, enterprise risk manager at The Wellcome Trust, said the Roads to Revolution report is a wake-up call to engage in wider discussion on whether the risk profession has the right skillset to navigate digital revolution. She believes softer skills will increasingly be crucial to success. “You have to be a partner and enable solutions, not a barrier. You must be approachable,” she said. John Ludlow, Airmic CEO, said language is “absolutely key”. “I think the first thing on language is to align it to the company culture in everything you do, and think about your stakeholders. You also need to be really inclusive in your language – so always use us, we and our and never me, my and I. The third piece of advice is: think about how you respond. Try not to go into auto-defence mode of saying: ‘We can only do that if.’ Turn it round and say: ‘When we do that we also need to think about this.’ It needs to become a positive message. Listen to yourself. Too often we go on the defensive and we need to be careful to avoid that,” he said.

Risk managers must react fast to avoid becoming business disablers in tech age

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