What can the risk manager do?

As demand for greater risk management increases from the insurance industry, Christopher Palm, of the Institute of Risk Management South Africa, considers how risk managers can make themselves future-fit and win over the ears of the board Becoming creative about risk management rather than depending purely on process should enable risk managers to earn their invite to the boardroom and have a greater say in the direction of the business. That was the view of Christopher Palm, chief risk adviser at the Institute of Risk Management South Africa, speaking at Commercial Risk Africa’s one-day seminar in Gaborone recently. With the theme ‘Roadmap to Success’, delegates heard from a number of risk management specialists on the way their role was changing and how they needed to upskill to maintain relevance and to increase their importance to the business. “Risk management should be about influencing decision making,” said Mr Palm. “It is not about risks that exist but about how your business can take advantage of the situation.” He believes big data will enable risk managers to encourage businesses to grasp opportunities as they emerge. However, risk managers do have challenges, he said. “How often have you been outside a boardroom waiting to make your presentation and someone emerges to say, ‘don’t worry, we’ve signed off the report already’? “That’s because you are not telling them anything they don’t know. There are other things that the exco and board find sexy – and risk management is not one of them.” He also suggested: “Ask yourselves: what innovation have you taken to the board in the past 18 months? “It is no wonder that the risk register or risk report is taken as read – it’s either old news or they don’t value risk as something that can truly contribute to the growth of the organisation.” But Mr Palm said that by developing a greater understanding of the broader environment in which the business operates and identifying opportunities, risk managers can become wholly relevant to the future direction of the business. “It is not just about systems but about people,” he stressed. “Use others in the business to get into a position where you become more creative. “Don’t morph into compliance or audit but morph towards those involved in the initial development stages and understand the future direction of the business.” Talking about the disruptive environment in which business are trying to operate, he said: “These advances happen quickly and can cause significant disruption, opportunities and risks. Organisations should strengthen the processes that help them to ‘anticipate and to respond by capturing new opportunities and managing emerging risks’. “A paradigm is a way of looking at things differently. When we make a paradigm shift, we can see, think, feel and behave differently.” Mr Palm added: “It has to be about decision-making. Become a risk-intelligent organisation. Make sure risk-intelligent leadership comes from the CRO’s office. “We tend to get involved once the commercial decision has been made; however we could involve the risk team from the start.” It is time to do more than create a risk register. Too many household names have crashed despite having excellent risk management teams, he said, asking whether perhaps they had needed risk management voices at the very top level. His approach is that risk managers have a unique opportunity to improve decision quality by sticking to the risk methodology basics and ensuring a risk-based context for decisions. Mr Palm’s top tips for risk managers included: Knowing the network in your organisation Governance structure Decision-making structure Become part of that network You cannot be everywhere – but be where it matters Virtual availability – minutes, reports, presentations Central documentation repository Get clearance and get busy Building your own network Be prepared to share Show and tell Get involved or create.

What can the risk manager do?

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