Online retailer THE ICONIC prides itself on fashion-forward designs. Its head of risk & controls, Sarah McNamee, says there is no one-size-fits-all approach to risk.
Paris. Berlin. London. Stockholm. Sarah McNamee, head of risk & controls at online fashion retailer THE ICONIC, has worked in some of the world’s most glamorous locations in her risk, compliance, and audit career to date. So taking on a top role at Australia and New Zealand’s fastest growing online fashion and sports retail, THE ICONIC, was a natural fit.
Sydney native McNamee’s impressive career to date has spanned different continents and industries, taking in some of the world’s biggest companies along the way. She graduated in 2008 from Macquarie University in Sydney, holding a double-degree in Commerce-Accounting & Business Administration-Marketing.
McNamee began her career with advisory firm Deloitte, picking up a graduate role covering process improvement and some elements of risk. Like most in the industry, she did not set out for a career in risk management, but quickly grew to appreciate the analytical nature of the work. In 2013, she moved to London to work for consultancy firm Protiviti, providing advice to fast-moving consumer goods companies, media and pharma businesses.
Moving back to Sydney with Protiviti, McNamee’s risk career took off with a role focused on risk governance and risk consulting. Helping clients plan and execute risk management strategies “piqued” her interest in spotting risks and operational challenges on the horizon. “That’s where I stepped away from audit and fully into risk work, and where I started to see the value in risk management as part of businesses’ wider strategy,” she says.
McNamee then became Risk and Audit Manager at Coca-Cola Amatil, the regional division of the global drinks giant, helping the company focus on competition, adapting to a changing regulatory environment, and managing operational risk. She reported to board committees about present and future challenges, such as the global trend away from sugar and its impact on the beverages market. “The company had a traditional but effective risk management approach, and it was about bringing conversations to the board and trying to influence decision-making,” she says.
McNamee joined THE ICONIC in July last year, taking on the newly-created role of Risk & Controls Manager. The position, covering strategic risk and controls and insurance coverage responsibilities, was handed to McNamee as the company sought to formalise its risk management operation. McNamee’s risk function sits separately from other areas of the business, giving her a “helicopter” view of the company. “In order to be effective, you need independence for your controls framework,” she says. “I report to the CFO, and in a dotted line to our parent group, Global Fashion Group,” she adds.
THE ICONIC, which sells everything from designer shoes to luxury sportswear, was founded in 2011. The retailer has grown quickly from having about five employees at its inception to more than 950 today. The company generated more than $267 million in sales in 2017 and wants revenues to hit $1 billion in the next three years. THE ICONIC’s growth comes as consumers, particularly younger shoppers, abandon the high street in preference of making selective and savvy online purchase s.
McNamee describes THE ICONIC as a “maturing startup”, with an established footprint in its field. With any fast-growing startup comes challenges, however, particularly in the tech-driven online space. Growth, new markets, and competition are “part and parcel” of the issues growing companies have to focus on, McNamee says.
McNamee is responsible for implementing THE ICONIC’s risk management and control framework, and “establishing it across the business”. At every level at THE ICONIC, risk management around our processes and systems is something that is hugely important to us and we’re keen to progress. With our high-growth environment and the evolving nature of our company, things are moving so quickly, as are the risks.”
So what risks does a growing online retailer think about? McNamee says remaining relevant, having the best and most inspiring assortment at the best price, the flexibility to scale in line with our growth and the agility to respond to changing preferences, ultimately creating a seamless experience for our customers.”
Of course, being an online business, safeguarding data also poses a unique challenge. “Data governance is a big issue. Data is core to our decision-making, and increasingly, we’re using big data. The way you collect, manage and use data is hugely important to support accurate and effective decision making,” she says. Data privacy is also front of mind. “With global best-practice development, such as [The European Union’s] GDPR (General Data Protection Regulation). It’s about ensuring we treat customers’ data correctly, and make sure it is safeguarded.”
Like every other online business, THE ICONIC is focused on keeping information safe and secure, in a world where even global heavyweights have been brought to their knees by malicious attacks. “Cybersecurity is an inherent risk,” she says, “There’s a new issue almost every week and a new article about a breach somewhere. Fraudsters are always trying to be a step ahead of the game. It’s about protecting our customers, managing reputation and mitigating the damage as well,” she says.
Out with the old, in with the new
How different is the approach to risk in a maturing startup? “Everyone is on the journey and believes in the values of the company. The principles of THE ICONIC are core to its decision making. It’s my challenge to make risk management relevant to key stakeholders. The number of hours I have to do that is limited, so my job is to articulate how decisions impact the risk management framework, and how they fit in line with our values.”
McNamee says it is her role to help senior executives understand risk in a practical sense, and how issues might impact customers, the company’s most important commodity. “If the customer is core to our decision making, how do I represent this risk in terms of our customers to key stakeholders and our Executive team. It comes down to knowing your audience and making it relevant to them. It’s making sure they are aware of the key risks facing our business and having the right tools in place to effectively mitigate these risks,” she says.
As THE ICONIC continues to grow, McNamee’s risk role will continue to evolve. She loves the changing nature of the job, as new risks emerge for the business. “No two days are the same. But the ability to effect change, and deliver on initiatives as a risk manager is much greater in a high-growth environment. I see the future of my role in helping support the business in taking the right risks to support our continued growth”
McNamee has learned a lot about startup risk management over the past year. Her biggest piece of advice to risk managers in smaller companies? That risk is not a one-size-fits-all function.
She adds: “Listen to your stakeholders, understand what’s important to them. Develop a framework that supports their needs as well as delivering a risk management function. Don’t try and emulate a standard approach. The tried and tested risk management model may work for a larger company, but for a startup, the nature of decision-making and the pace of change requires a framework and approach that’s practical and resonates with the culture of the business.”