Sean Chan says smaller companies should use enterprise risk management to become more competitive
The president of Singapore’s risk management association, RIMAS, is urging SMEs to implement an enterprise risk management (ERM) programme to cope with the threat of disruptive innovation.
Speaking to StrategicRISK, Sean Chan said that small and medium-sized companies in Singapore were lagging behind their larger counterparts when it came to ERM, despite being more vulnerable to disruption risk.
“Disruptive innovation has a greater impact [on SMEs], meaning they have less time to respond,” he says. “This highlights the need [for SMEs] to have proper risk management systems to help them manage this kind of risk that comes without an early warning,” Chan said.
Most large companies in Singapore have established ERM systems and processes following the revised code of corporate governance issued by the Monetary Authority of Singapore.
But Chan said many smaller companies had not implemented ERM due to lack of resources and it not being a statutory requirement for them to do so.
“SMEs also have less exposure to ERM and how it can help their business, not just in managing risk but also exploring opportunities as well,” he said.
Chan will lead an afternoon workshop on implementing effective ERM for SMEs at the Asia Risk & Resilience conference in Singapore on 24 August.
“The focus for SMEs is really on the people and culture. For small companies, they’re more flexible in terms of changing people’s mindset. ERM is easier for SMEs to implement across the whole company because it’s smaller, more flexible.”
He added: “ERM can help SMEs when they look at new business opportunities to have a balanced view of its up-side and down-side so they can be more competitive.”
The ARR conference is being held from 24-26 August at the Marina Bay Sands Convention Centre in Singapore, and includes speakers from the Ministry of Home Affairs, the United Nations Office for Disaster Risk Reduction and RIMS, among others. For more information, click here.