DISCUSSION Rethink risk leadership

by John Hurrel, CEO, Airmic

Businesses should consider appointing an executive risk leader to navigate today’s increasingly complex world, or risk leaving their company exposed to the next big crisis, according to Airmic and other leading business organisations.

According to the new report Tomorrow’s Risk Leadership: delivering risk resilience and business performance, boards are failing to navigate today’s increasingly complex risks, potentially resulting in loss of value and eroding resilience in times of crisis. As a result, it challenges businesses and business leaders to consider whether the risk leadership in their organisations is sufficient to meet the demands of today’s fast-paced and interconnected world.

The research was published by global business think tank Tomorrow’s Company in collaboration with Airmic and Good Governance Forum members CIMA, IHG, Korn Ferry, PwC and Zurich.

John Hurrell, chief executive of Airmic, said: “While companies are usually experts at managing their core risks, all too often the management of risk remains a siloed operation, detached from strategy.

“What we are recommending in this report, is that companies consider appointing an executive voice of risk to give a corporate-wide view and help boards to cut through the vast amount of risk information and focus on the most important and strategic risks.”

Airmic says the risk leader should report directly to the board, and be in a position to influence the strategic direction of the business, all of which will require independence, assuredness and broad business knowledge.

“A culture of challenge is a key sign of a healthy company. Deference and group think are dangerous on the executive committee and the board. Finding and empowering the right risk leader is a vital enhancement of a company’s resilience and robustness,” said Tomorrow’s Company CEO Mark Goyder.

Hurrell said the report is a must-read for board members and risk professionals alike. “It gives us a good idea of where the risk profession is heading. Over time, we will see more and more risk professionals stepping into these more strategic roles and for those who wish to take their career in that direction, this is an extremely exciting time.”

He added that risk professionals must also make sure they have the skills and qualifications to rise to the challenge and to meet these higher expectations. “Risk professionals, whether they are leaders today or are new in their careers, will increasingly need broader business awareness and to be mindful of how risk decisions impact and are impacted by corporate strategy,” he said.

Find the original article here.