Ahead of the RIMS Risk Forum, board members from the society’s Australasia chapter consider the changing risk landscape and the challenges that it presents to RIMS and the wider risk profession
Eamonn Cunningham
Former chief risk officer, Scentre Group
What is the top emerging risk on your radar in the next 12 months, and why?
Even though it is flavour of the month, cyber must remain in the minds of risk managers. In addition, given that economic conditions are in general terms lacklustre, this needs to be an area of focus. You also need to have regard to political risks. There are a number of actors resident in our region or have enormous impact on our region. The potential impact of this must be considered.
What will the risk industry look like in 10 years?
If current practitioners truly show their innate worth, then the risk profession should cover the full spectrum, from the day-to-day operational to the strategic level. The increasing intensity of business today, driven by hyper-competition and the ever-present demand for efficiency, will result in an intensifying of risk. Increasing interdependency between systems and smarter technology, upon which business becomes ever-more reliant, coupled with factors such as lower stock levels and stretched supply chains, will require an altogether more sophisticated risk management approach.
Alicia Genet
Group risk and audit manager, Santos
What is your priority for RIMS Australasia in the next 12 months?
My priorities are engaging with South Australia and Victoria heads of risk/insurance on the value of RIMS membership. As part of this, we are working to enhance the RIMS Australasia website to provide a simple and easy-to-use member toolkit and communication platform.
What is the biggest challenge facing the risk management profession?
Business resilience. This is more of a control than a risk. However, with the current instabilities on a global and national level that expose organisations to many risks previously considered dormant or as black swan, I am encouraging businesses to focus on their response and continuity frameworks in order to best manage and mitigate rapidly escalating or unforeseen risk events.
What will the risk industry look like in 10 years?
Businesses are increasingly seeing the value of risk management as an integrated part of the way they function and make decisions, rather than a separate or ‘bolt on’ function. For this reason, I see the risk industry in 10 years as one that has even stronger symbiosis with strategic and governance, as well as operational functions and is focused on practical application and value over risk theory.
John Evans
General managers, group insurance, Wesfarmers Limited
What is your priority for RIMS Australasia in the next 12 months?
The priority for RIMS Australasia is to continue to provide a professional body that is dedicated to those who have a direct responsibility and accountability for risk within their organisation. I am keen to see RIMS develop a local educational platform that facilitates the ongoing development of risk professionals, enhances the sharing of knowledge and the building of skills. We need to continue to provide opportunities for members to have access to risk information, risk trends and risk solutions from a variety of sources while also creating an opportunity for our members to network.
What is the top emerging risk on your radar in the next 12 months, and why?
I am of the view that the top emerging risk will be the risk that is created by our current global uncertainty. Many nations are now in a phase of major political change and uncertainty and this brings about a threat of global uncertainty, which has a major impact on the economy. The views from the electorate on what they require from government and political leaders are far more reactive than in the past. There is a risk that global inequality will continue to cause division, driving change and conflict.
What is the biggest challenge facing the risk management profession?
The rapidity and degree of change will be the greatest challenge for the risk profession. Risks will emerge more plentifully and rapidly and the expectation of risk solutions will become more intense, both from a timeliness and effectiveness perspective. New advancements will create many new and wonderful opportunities together with many benefits to mankind. But at the same time, it will create many new challenges and a realm of totally new and unprecedented risks. Having the appropriately skilled professionals to be able to manage such a degree of change will be the greatest challenge.
What will the risk industry look like in 10 years?
My view is it will be very different from today. Risk managers will be dedicated and embedded within disciplines and the demand for generalists will be limited. Technology will be developed that can replace much of the industry as we know it today. Tick-box processes will disappear and risk management will be based on effective solutions and outcomes that are truly measurable.
Kevin Bates
Group head of risk and insurance, Lendlease
What is your priority for RIMS Australasia in the next 12 months?
Returning value to our members and sponsors. RIMS continues to connect risk professionals, educate and engage, and we will focus on enhancing this with a view to fostering growth in the network. For example, our roundtable sessions have been fully subscribed all year, to the point where we are looking at adding a few more. The richness of discussion is truly magnificent at these events, and the opportunity to mix with like-minded risk professionals is enjoyed by all.
What is the top emerging risk on your radar in the next12 months, and why?
A risk which has been on most of our registers for almost a decade, yet we can still refer to it as ‘emerging’, is cyber/technology risks. These continue to evolve, and that is why they are constantly ‘emerging’. The management strategies to live in a technology era and, at the same time, feel protected from cyber-related issues beyond our tolerance continues to evolve, and will not be off the radar any time soon.
Other risks may result from present risks or threats playing out and giving rise to a whole new palette. Brexit will have some twists and turns, as undoubtedly will the present US administration. Throw into that mix heightened levels of military deployment in hotspots around the world and it seems inevitable that a few very interesting and unusual risks will emerge.
What is the biggest challenge facing the risk management profession?
Articulating ‘value’ to an operational business. Most businesses understand there is a need for risk reporting, but struggle to take the critical step from risk reporting to risk management. A positive to come from this is that ‘everyone thinks they can and already do manage risk’. That is half the battle. Bringing them into the fold to ensure that the whole organisation identifies and analyses risk in the same way is the difficult part. Many individuals are responsible for risk reporting into another function, which will always dilute the message and disempower the risk function. The solution in ensuring an enterprise-wide approach lies with those who sit at a senior level.
What will the risk industry look like in 10 years?
It will go one of two ways. Risk management will either be respected as a function and given the appropriate respect in the boardroom. Or it will simply devolve into a risk reporting function, with businesses only truly seeing the benefit of risk management when there is an issue, which they did not foresee, which impacts strategy, business plan and profit.
Kate Beddoe
Chief risk officer,Vector Ltd
What is your priority for RIMS Australasia in the next 12 months?
We have several priorities. Provide exceptional value to our members and foundational sponsors through holding thought leadership and networking events throughout Australia and New Zealand. Specifically, the RIMS Australasian Forum in August, a series of risk roundtables, rising star and women in risk functions and social events.
In New Zealand, in addition to holding general risk roundtables with our members, we have begun sector risk roundtable discussions starting with the energy sector and are looking to next expand this to healthcare.
We have also recently established a Women in Risk network (in partnership with BNZ) and will be commencing a mentoring program to support younger women coming through the profession, women returning to the workforce after a maternity break and women looking to accelerate their careers to the c-suite. Of course, we are always focusing on growing our membership across Australasia.
What is the top emerging risk on your radar in the next 12 months, and why?
I’m not sure there is one top emerging risk. One significant risk is the continued convergence between the delivery of energy services and the internet of things. This escalates the potential cyber and data risks for our business. Both the pace of innovation and digital disruption as well as the development of cybercrime is expediential.
Climate change adaptation is another emerging risk with increased focus. Business needs to fully risk assess both the physical impacts of climate change and the economic impacts associated with a transition to a low carbon economy. For some sectors, who are unprepared, this has the potential to create financial shocks for their business – look at the recent examples of the Commonwealth Bank of Australia being sued by shareholders for failing to adequately disclose climate change risks and NZ Super Fund dumping Genesis Energy shares in New Zealand due to their carbon position.
What is the biggest challenge facing the risk management profession?
Succession. There is not a huge talent pool of young risk managers coming through the profession. Graduates from University don’t see risk as a career path yet – it’s generally a role people “land in by accident” rather than strive to be part of.
What will the risk industry look like in 10 years?
Who knows! The pace of change is so rapid. Various parts of risk managers’ roles may be replaced with AI and Bots – especially in the quantification space. I think risk managers will morph into strategic advisors who focus on global and regional trends that influence and impact business models. I also think the importance of ethics in decision making and conduct risk will become a key area of focus for business.
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