As businesses globalize and operate in an ever more interconnected (think social) world, consumers and stakeholders increasingly wield great power from a keyboard! Combine this with the pace of technical innovation and disruption (cyber, fintech etc) it is no surprise that traditional ways of viewing risk have started to change.
Risk is nothing new of-course. Most businesses already operate with basic risk management principles, some better than others. However these principles still seem to be grounded in ‘old school’ thinking. A recurring theme from the current royal commission into banking here in Australia, is the seeming lack of managing risk at board level. Risk in terms of strategic value rather than just as a set of negatives, can now be much better defined.
Friend and business partners of HPS, Greg Hutchins, CEO of CERM, a US based risk expert spoke to me about this. According to Greg, all US federal agencies have been tasked to develop and comply with a formal enterprise risk management framework to become core to that agencies operation. Greg suggesting that risk frameworks could replace core ISO standards such as ISO9001 (quality). With an alleged 70% of current ISO9001 certified businesses still to transition to the latest ISO9001:2015 edition of the standard, it will be interesting to see how this evolves. Especially given the re-emphasis of risk in the latest ISO updates.
Implementing a formal risk management framework allows you to be smarter about defining specific risks and how these affect (positively not just negatively) the ability for your organisation to meet your business objectives.
According to a Deloitte-sponsored Fortune risk management survey in 2017, a value-focused strategy can help organizations create value and improve performance.
I asked HPS founder and risk management advocate Peter Holtmann to comment. You can listen to my interview with Peter here. Clearly the key takeaway is that not ‘doing’ risk is risky!
The good news is that organisations such as CERM and HPS can help. Become informed by listening to our podcast, to understand where your current gaps may be preview an actual ISO31000 Gap Audit Report HERE. Get a global insight by subscribing to CERM’s eMagazine HERE. Read the Fortune survey HERE. I promise that there are no catches in any of these links, we are here to educate and inform. If you want to talk about how any of us can help simply connect and let’s start a conversation.
Author:
Edward Balfour, Associate HPS. The views contained within this article are expressly the sole opinion of the author unless otherwise stated. April 2018.
Sources:
Greg Hutchins, CERM Academy HPS partners
Media Outlets – banking royal commission
Deloitte – risk survey 2017. View survey results here.
Kiran Bhagat, iComplied (ISO31000 audit tool) HPS partners
Connect: