As thousands of risk and insurance professionals across the industry gather for the Risk & Insurance Management Society’s annual conference in San Diego this week, I caught up with John Haley and Dominic Casserley about some of the external forces driving risk higher up the agenda as a boardroom issue.
The rewards associated with globalization do not come without risk. An event in one small corner of the globe can send shockwaves across entire industries and economies. Keeping pace with this fast changing corporate risk environment is a challenge, whether it’s across trade routes, business systems or the exchange of information. The global economy is much more connected and reacts much more quickly to news.
New and Emerging Risks
Second, we’ve got new risks like cyber risk which is now on everyone’s radar, but it remains a challenge because it’s evolving so rapidly.
The geopolitical situation has become less stable in many parts of the world and that affects enterprises both large and small. Instability has the potential to send shocks to the system.
All of these are compounded by people risk. “If you think of some of the risks stemming from the financial crisis,” said Haley, “a lot of those relate to people and the incentives that organizations had in place. When you think about some of the emerging risk areas, such as those stemming from advances in technology and social media, a lot of those relate to people and employee behavior as well.”
Add to all of this the growing expectation, accountability and regulation placed on organizations to demonstrate sustainable business practices, and you can see why risk is high on the boardroom agenda.
Opportunity of Risk Professionals
People used to think of risk management as primarily being about protecting corporate assets and the organizations’ income statement. Now – It’s still about protecting the company but it’s also about enhancing value and creating opportunities for growth. We see that there’s an evolution required within the risk management community to drive change, increase corporate resilience and preserve growth.
See my interview with them on this video.