Survey finds that four in five risk managers are faced with the issue
The infrastructure sector significantly undermanages risks and lacks professional risk management, according to a recent McKinsey & Company report.
One issue, it says, is gaps in risk training and a lack of commitment in embedding a risk culture from senior management. The survey respondents appear to agree.
Some 80% said there were gaps in risk training in their infrastructure project, and 63% agreed that each division on the project has different practices on risk management, some formal, others less so (see below).
Singapore-based risk manager Eric Lee agrees that much more can be done.
“Managing of risks should be a company- wide responsibility. It starts from management and cascades all the way down to the person making risk decisions on the project (e.g. project managers and engineers) on a daily basis,” he says.
With so many parties involved, maintaining consistency in risk culture and training can be a problem.
Lee recommends educating staff and contractors through constant dialogues and reinforcing the message of decentralised self-management for the project: “These actions taken on the sub-project level will enhance the capabilities when aggregated at the project level, bringing down the overall project risk.”
Kevin Kwok, head of enterprise risk management for City Developments Limited, says he launched a series of risk assessment programmes two years ago.
The aim was to internalize lessons learnt and see if project managers could assist the risk department to detect problem areas early so they could develop more relevant risk management strategies.
“These efforts are tracked and reported to the management in order to forge ownership and alignment with our overall company strategy and business goal – i.e. to develop the most desired real estate products for our customers,” he says.
“I would attribute the responsibility are a shared one with my project department leading and owning the entire process of risk assessment and control self-assessment process while we, risk department to establish the standard, framework and to provide the necessary training for them.”