BarnOwl Info Sharing Insight: The Importance of External Context Setting and Monitoring in Risk Management with Michael Ferendinos
June 30, 2016
BarnOwl Info Sharing session: 30 June 2016
EXTERNAL CONTEXT SETTING, MONITORING AND REPORTING WITHIN RISK MANAGEMENT
By Michael Ferendinos – IRMSA Chief Risk Advisor
Michael, with his wealth of experience presented to a packed audience today at BarnOwl’s bi-monthly info sharing session. Michael speaks with authority having been the chief risk officer of AECI Limited, the Head of Enterprise Risk Management (ERM) and Business Continuity Management (BCM) for Rand Refinery, and prior to that an ERM consultant for Marsh (incorporating Alexander Forbes Risk Services). Michael is also the Chairman of the IRMSA Risk Intelligence Committee which informs the risk fraternity and corporate South Africa about internal and external risks affecting the country. Michael’s achievements include writing and presenting the first two IRMSA South African Risk reports with world-renowned strategic futurist and scenario planner, Clem Sunter.
In the presentation on ‘external context setting, monitoring and reporting within risk management’, Michael demonstrated the value of risk management with very real and practical examples. Too often as we know, risk management reporting is seen as a ‘tick-box’ exercise and about presenting ‘static’ top risks to the risk and audit committee and possibly the board. One gets the feeling that many organisations still see risk management as a ‘compliance’ issue and not as a ‘strategic business enabler’.
The one thing that became clear to me by the end of the presentation is that there is a lot of truth in the quote by Albert Einstein that ‘The thinking that got us here won’t get us there’. Most of us go to work every day and work flat out within our comfort zones generally doing the same kind of thing day in and day out. Once or twice a year we go on a breakaway ‘strategic planning session’ where we come up with some great and exciting ideas, get back to the office and carry on with ‘business as usual’ and sometimes implement a few of the new ideas.
Michael highlighted how a risk officer / the risk management function can be a great enabler and champion for getting business leaders and management to think more strategically on a far more regular basis and assess the broader context of how their businesses operate and will continue to operate taking into account a local, regional and global perspective. Even a small to medium sized national-based (e.g. SA based) organisation will be affected by what is happening regionally (SADC / Africa) and globally. We all felt the financial crisis in 2008 and we are all currently feeling the exchange rate pinch, the rising cost of inflation, the downturn in resources (mining) exacerbated by the Chinese slow down and stagnant growth in Europe. Our economies and all of us are inter-connected and if our trading partners aren’t doing well, we won’t have a market to sell our goods and services into. In addition, if we don’t take heed of technological advancements and other economic, societal and environmental changes and gear ourselves up and / or re-invent ourselves from time to time, our businesses will become redundant.
The various ‘economic revolutions’ / ‘game changers’ are speeding up. The 1300’s was the start of the Renaissance; the late 1700’s, the First Industrial Revolution with water & steam power; the late 1800’s, the Second Industrial Revolution with electric power; the mid 1900’s, the Third Industrial Revolution with electronics & information technology and since 1990 and the Fourth Industrial Revolution with the digital revolution. The Fifth Revolution is around the corner with game-changers in the areas of nano-technology, material technology, genetic engineering, robotics, medical, The Internet of Things, advanced information management (e.g. biometrics, social media, drones), energy etc. The better our tools get (i.e. technology) the faster and faster things change. A few classic examples of household names which carried on with ‘business as usual’ are Kodak, Polaroid, Blockbuster etc. I wonder when and how the Middle East and oil businesses will re-invent themselves in the next few years with the advent of ‘fracking’ and the huge advancements of electric cars such as Tesla (https://teslamotors.com/).
So what is my point? Michael, gave us as risk practitioners great insight into how to become far more strategic to our businesses by identifying not only internal (preventable, tactical and strategic) risks but thinking ‘out of the box’ taking into account the bigger picture and the external context from a local, regional and global perspective. Risk and Opportunity management is a ‘living’ thing. We need to remind management and exco who are ‘flat out with ‘business as usual’ of the inter-connectedness of risks and the external environment (context) and to raise awareness and stimulate debate. In this way, we as risk practitioners will elevate our standing within our organisations and risk and opportunity management will take its rightful place as a strategic business enabler and imperative rather than a ‘compliance / tick box’ exercise.
You can download Michael’s presentation here and download a video of the session here. Once again thank you Michael for your most enlightening presentation and to all those who braved the traffic to come to our info sharing event. Also thank you to IRMSA who are doing a great job educating organisations w.r.t. risk and opportunity management and professionalising our discipline.
Written by: Jonathan Crisp
Director – BarnOwl GRC and Audit software
About BarnOwl:
| BarnOwl is a fully integrated governance, risk management, compliance and audit software solution used by over 200 organisations in Africa, Europe and the UK. BarnOwl supports best practice risk management, compliance and audit frameworks (e.g. COSO, ISO31000, Compliance Institute’s handbook, International Professional Practice Framework), whilst offering a highly flexible and configurable parameter-driven system allowing you to configure BarnOwl to meet your specific requirements. |
