Risks on the rise as companies cross borders

Speaking after StrategicRISK’s inaugural annual Asian conference, held in Singapore recently, Geetha Kanagasingam (pictured) said that there were six key concerns of businesses operating across international borders – “regulatory environment, political instability, market type, supply chain, competition and talent.”

This posed an enormous challenge to risk professionals, Kanagasingam added, due to “the differences in culture, mindset and the way business is carried out” across our region.

“Asia Pacific is a very diverse region with many cultures and countries with different markets, from emerging to developed,” she said.

“Hence, it is absolutely crucial for a risk manager to be equipped with excellent communication and soft skills. They must also exercise flexibility in their roles.

“For example, they may wish to apply a more risk review role for a risk mature territory versus an immature territory, where a risk advisory role may be relevant as more guidance and hand-holding may be required initially.”

A robust due diligence and risk management framework on doing business across international borders would inevitably identify regulation as a key risk, Kanagasingam pointed out.

“Regulators are our key stakeholders so we need to ensure that there is an effective process in place to ensure compliance, and address any changes or potential changes in the different regulatory environments in which we wish to operate,” she said.

Singapore-based Kanagasingam added that political risks, now more than ever, appeared to be escalating for companies operating internationally.

“They must be prepared to mitigate and put in place back-up plans to minimise the impact, as it is a risk that is beyond control, which cannot be avoided,” she said.

“Depending on the degree of the risk, it may even be necessary to take drastic the measure of exiting a market, if need be.”

New Frontiers

The ‘New Frontiers: How to manage the risks of operating across international borders’ session at the 2014 Strategic Risk Forum addressed issues such as practically managing supply chain risk, the long reach of extra-territorial regulation, ethics and governance issues, and embedding ERM, insurance and risk culture across international operations.

Kanagasingam was joined on the discussion panel by vice president of finance and purchasing at Shangri-La International Hotel Management, Parikshit Sen Gupta; governance and risk manager at DKSH Management, Eric Lee Chuin Howe; and underwriting director at Zurich (Singapore Branch), Li Shan Yeo.

Themed ‘The path to better risk management in Asia’, the forum featured risk professionals and specialist brokers exploring current and emerging trends in key risks affecting companies today. There was an emphasis on discussing practical steps that companies can take to identify, assess, manage and mitigate these risks.

Strategic Risk Forum 2014 was sponsored by AIG, Marsh, Swiss Re Corporate Solutions and Zurich; associate sponsors were ACE Group, Allied World, Lloyd’s and XL Group.

The event was supported by RIMAS and the Pan-Asia Risk & Insurance Management Association (PARIMA).