There are opportunities, but there’s still work to be done
In setting the scene for day two of the Institute of Risk Management South Africa’s (IRMSA) Annual Digital conference, Conference Facilitator, Jeremy Maggs, opened the conference by asking, “What do you wish you had known in March, that you know now?”
Three ingredients for surviving
Gary Scott, CEO at KIA said, “Covid-19 was not quite the apocalypse or doomsday we had expected. However, is it not too soon to be talking about Covid-19 in hindsight?”
“In the age of uncertainty, you are never too big or too strong to fail. Thanks to the ease in lockdown, we are slowly but surely getting back on track. It is about the positive intent to be able to survive. Yes, product is key for business success, but it is not the be all and end all,” said Scott.
“The ingredients for surviving in uncertain times are optimism (every challenge is an opportunity… it is a mindset that seeks growth and expansion), agility (you need to move, reinvent and progress… plan long term to live long term, win the war and win the battles, be adaptable… the moral compass trumps the rule book, act in order to have an impact, good ideas also don’t carry a rank), and lastly, diversity (collective intelligence requires cognitive diversity),” added Scott.
Risks and opportunities
“There are opportunities as the world reorganises itself, but there is still work that needs to be done. The Trump versus Biden saga, market currency and interest rate highs and lows etc., mark an interesting road ahead. As a risk community we have been challenged in many ways,” said Zuriel Naiker, Managing Director Sales & Distribution, at Marsh Africa.
“When we look at historical progress, for example, looking back at the 2008 financial crisis, the extreme weather events of 2017, and 2019, the year that presented the most recent event, Covid-19, how have you evolved? Have your risk and advisory services kept pace, and how have these historical events influenced your risk?” Questioned Naiker.
“There are significant forces driving change and headlines that are making waves, for example, a political party recently drove protests against a retailer, race and gender headlines, the concern of the second wave of Covid-19… these are driving change in societies, the economy and businesses alike,” said Naiker.
“There are economic shifts… unsustainable levels of public debt, changing economic relations and business confidence is at its lowest since 2008. There are social anxieties… inequality is growing. There are sustainability setbacks… economic recovery may take precedence over ensuring environmental sustainability, a brown recovery may be an easier option, differing green incentives. Technological dependence is another thing… an acceleration of automation and digitalisation, hasty adoption of surveillance technology and exposure to cyber risks will increase,” he added.
“In the new normal what can we expect and what can we see. Will cyber risk rise? Will the black swan effects become more prominent? How adequately prepared are you for these future events?” Questioned Naiker.
“Focus on risk management achievements and plans, have a thorough market engagement plan, including potential use of international hubs, involve the c-suite especially for D&O, and lastly, market the programme effectively and look through a cross-class lens,” concluded Naiker.
The focus on the ‘S’ risk in ESG
“The Covid-19 pandemic is foremost a global humanitarian crisis. It has changed the risk landscape. Structural changes have created risks related to Environmental, Social and Governance (ESG) factors. The ‘S’ factor in ESG has become more relevant from a risk perspective. Leadership is responsible for creating value by managing ‘S’ risk,” said Anashrin Pillay, CEO of Risk Insights.
“The cost of human capital remains the largest fixed cost in all businesses. Employee focus is on employee contracts and rights, cost cutting leading to retrenchments, workforce diversity and equality, employee health and safety, ergonomics, communication with employees, working virtually from home, mental health and wellness, family support and infrastructure,” added Pillay.
“Leaders in organisations can mitigate workforce risk to create value with continuous communication and engagement with employees. They can consider employee wellness programs to ensure the wellbeing of employees, create a safe working environment and fairness in terms of remuneration. HR is a key pivot,” continued Pillay.
“In terms of reskilling the workforce in a post Covid-19 reality, the new face of work is being increasingly automated and digitized. Nearly half of the jobs are likely to be computerized over the next 20 years. So, when we talk about the workforce, we could just as easily be referring to a robot as a human. Are your people ready to work alongside artificial intelligence as part of a hybrid workforce?” questioned Pilllay.
Leverage risk, don’t just mitigate it
“Yesterday’s risk management practices are not suitable for today. The role of the risk manager has changed,” said Greg Chamberlin, Product Manager at LexisNexis.
“Innovation in risk management requires generating new ideas or approaches that are useful to or benefit the company. It is the deliberate application of information, imagination and initiative, in order to derive greater or different benefit from resources. We need to use the information and take action. With the right technology in place, we can leverage the value of risk management,” added Chamberlin.
The new leadership agenda
Dr Nicholas Crisp, NHI Developer at Ministry of Health said, “nothing is really ever going to be the same. The future is here… it has arrived. Like Abraham Lincoln said, ‘The best way to predict your future is to create it’. And that is why we need great and strong leadership. Here we stand in uncertain times, facing an uncertain future but we have to build on it… the clock is ticking. We will continue seeing scarce medical skills, infrastructure issues etc., but the government's handling of Covid was a test run for how NHI will play out.”
“Managing the risks and opportunities effectively, in the current and future age, needs new solutions. We are getting there as we move into the fourth industrial revolution, but we have to break down the silos, build a framework to connect the dots, collect data and link the dots, and use history to help foretell the future,” said Nicky Downing, CEO of Guideline BizTech.
Writer’s Thoughts:
The two-day conference was insightful and packed with key themes and topics that posed many questions and scenarios about the future. The role of the risk manager has and will continue to change. How adequately prepared are you for future events and the risks of the future? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za
