Risk managers weigh in on the positive impact of regulation
Most risk managers agree that regulatory reform has improved the strength, transparency and reputation of the industry that they operate in. In the StrategicRISK survey, 42% ‘somewhat agreed’ with this statement, 4% ‘strong agreed’, and 25% ‘somewhat disagreed’.
BMW Brilliance risk and insurance manager Sharon Shi said it was important to take a long-term view on the potential impact of regulatory reform.
“In the short-term, it seems regulation changes might have more impact on growth, [with] more operational costs, more process clarification [and] training. But in the long-term, it really enables a company to grow in a sustainable way,” she said.
Shi points to China’s Anti-Monopoly Law, Environmental Law and New Energy Vehicle regulation as conventions that are driving positive change for the long-term growth and sustainability of the automotive industry.
“It helps the industry in China to develop in a healthy way after a sharp [growth] in China’s automotive industry, especially in the premium segment,” she said.
Brad Tymmons, enterprise risk and insurance manager at EnergyAustralia agreed that regulation had helped improve the reputation of the energy and power industry in Australia.
EnergyAustralia and four other major industry players were brought before the regulator for unsolicited sales tactics.
“All of us have banned door-knocking [as a result of a regulatory breach and fine] – it’s now not a practice for us to get new customers,” Tymmons said.
“That has been a huge change and it changes the perception of [our company] in customers’ eyes. We’re controlling our brand more and making decisions by responding to what customers expect and need from us, and that’s not cold call door-knocking,” he said.
Failure to adhere to regulatory standards also has an impact on investment, according to Deloitte Southeast Asia financial services industry leader Ho Kok Yong.
“We do see a lot investors coming looking at other emerging markets like Myanmar and Vietnam, and if you are not up to speed and you’re not transparent and you don’t adopt best practices, then people may give you a miss in terms of investment,” he said.