IRM sets out risk agenda for 2021

A global pandemic, increased geopolitical risk, conflict, bushfires, Brexit, flooding and political unrest – the Institute of Risk Management (IRM) asked its senior members from Special and Regional Interest Groups (SIGs/RIGs) and Global Ambassadors for their outlook for risk management in 2021.

In his introduction, Iain Wright CFIRM, chair, Institute of Risk Management, noted that organisations have had to adapt to survive and ways of working are more reliant on technology than ever as many staff work from home.

Organisations are facing increased and increasing risks from both internal and external factors that have undoubtedly been exacerbated by Covid-19, including: people risk (mental health, wellbeing, physical health of staff), increased cyber-attacks, supply chain disruption and ongoing market confidence/volatility across sectors, which is exacerbated by geopolitical volatility in some areas.

”I think it’s fair to say that risk professionals have never been so busy and pivotal to the survival of organisations of all types globally; risk management has been at the heart of the global response and our profession is firmly in the spotlight. Risk managers’ competence and resilience have been tested like never before and lessons have undoubtedly been learnt. We’ll be releasing the findings of a follow up to our survey of the global risk management response to the pandemic shortly.”

Giving the APAC perspective, Gareth Byatt IRM Global Ambassador for APAC and principal consultant, Risk Insight Consulting, said the sustainability risk and broader ESG agenda would remain strong for organisations in Asia Pacific.

”The APAC region is at the forefront of dealing with climate change and all other aspects of sustainability. The APAC economies continue to move forwards, and they will need to demonstrate commitments to curb greenhouse gas emissions and to make inroads into sustainable cities, responsible consumption and production and greater disaster risk preparedness.”

”Will capitalism change, as more businesses of all shapes and sizes become more purposeful in their role for society, and their place in the world?” he asked. “Covid-19 may well have speeded up the desire to move forward with this.

”How will organisations ensure they are flexible and adaptable to fast-changing circumstances, including technology advancement, to capitalise in a responsible and sustainable way on opportunities they see and create?

“How can the private sector be purposeful for society and the environment in which they operate? Many businesses have been tested like never before in 2020. Can we all help to make a difference through taking part in efforts such as the Sustainable Markets Initiative?”

Looking ahead, people risks will feature strongly, according to Aileen Wallace and Socrates Coudounaris, co-chairs of the NED/CROs SIG. 

“Covid-19 has put companies through a real-life test. It’s been the moment when actual organisational culture crystalises and staff gets to see through company actions, where they stand on the culture maturity scale.”

”Companies have recognised the strength of their human capital and their ability to carry on operating via remote connectivity. Nevertheless, the people agenda and mental health and wellbeing have never been of greater importance.”

”Organisations are revisiting their people agenda which were designed for a different paradigm. If 2021 allows for some return to the office, with social distancing, it would be under a ‘new normal’ offering a physical location for colleagues to meet and interact in person with remote working remaining the norm.”

The pandemic has also elevated risk management to a new level within the organisation, they noted.

”The importance of risk management and operational resilience strategy is front and centre on any Board agenda. Risk professionals are presented with the opportunity to engage with the Board and steer in a dynamic manner towards a truly resilient organisation by design.”

”Key risk areas of focus are new technologies, data protection, cyber security and outsourcing arrangements, whilst keeping an eye on horizon scanning. For those companies who are taking into consideration the lessons learned from 2020, it will give the Board, the senior leadership team and the staff confidence for dealing with any future demands that may come their way.”