It is with gratitude that I will serve, for the next two years, as the President of this prestigious organisation. I have taken this position at a time when we are entering a new decade, but more especially, at a time when almost every organisation in the world is in the grips of a seismic shift in risk landscape. Whether it is from the effects of technology, social media, geopolitical tensions, economic contractions, climate change or corporate scandals, destructive events to organisations seems to increase in numbers and kinds.
Given the trend of increase in the complexity and interconnectivity of risk we face today, with little expectation of a reduction in high-impact events, programs of managing risks individually have proven not to be foolproof. The solution of continuous risk consideration on an enterprise-wide level, ERM, has, as a result, been gaining widespread recognition and support. However, besides its varied definitions, ERM faces limitations mainly due to implementation difficulties, organisational frictions, the difference in the definition of risk appetite across an ;
organisation as well as to the difference in risk appetites of different stakeholder groups.
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For us risk leaders, what matters is not discussing the evolution or limitations of ERM but for us is to equip ourselves to succeed at delivering value for our organisations and at serving the interest of stakeholders in the face of the risks we face today. Techniques, policies, systems for identifying, evaluating and managing risk are important, but if we fail to anticipate or navigate risks because of deficiencies in our risk leadership, these rules will not make any
difference. And when that happens, the blame for the consequences will rest solely with us.
In an increasingly uncertain and volatile world, there is arguably no more important role for us than to prepare our organisations for risk—taking it, avoiding it and managing it. This was evident before, during and after the 2008 financial crisis. Organisations that were ill prepared to manage the risks they were exposed to for over a decade either collapsed or were badly damaged by the financial markets’ meltdown and subsequent recession. In contrast, those that emerged unscathed, had better leadership especially with respect to risk management.