91% of the risk managers who attended a workshop hosted by Willis at this year’s Airmic conference do not see ERM as a vehicle that can change organisational behaviour.
Speaking at the workshop, Paul Maynard, Chief Placement Officer for Willis UK, echoed the sceptical feeling of risk managers in the room: “The tone towards risk management has to be set from the top and this is ultimately driven by incentivisation.”
“There should be a clear demonstration to new and existing employees of what the company is doing to manage risk. This simply represents a sensible way to run a business, not necessarily ERM,” he said. Similarly, Geoff Taylor, Executive Director, Risk Solutions Willis UK, agreed that risk management should be incorporated in employee inductions and appraisals. “It is important to understand what works in your organisation, the key is in making risk management accessible to people across the business, not just at corporate level,” he said.
Challenging the Board
According to Tom Teixeira, Practice Leader, Global Markets International at Willis Group, the only way the board can fully understand the potential size of the impact is to express the risk numerically. “In order to drive a change in company culture, financial numbers have to be used. Accurate figures are worth more to a board than red, amber and green coded responses to risk. It is mechanisms like this that help to change the culture at all levels of the organisation,” he said.
A Tailored Approach
The panel agreed that risk management must be tailored to each individual organisation if we are to avoid systemic risk emanating from a one size fits all approach. “There is not one way of doing ERM, diversity of approach is the most important way of managing risk,” explained Geoff Taylor.