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Institute of Risk Management pledges commitment to Armed Forces community by signing Armed Forces Covenant

Senior members of the Institute of Risk Management (IRM) recently gathered at a co-signing ceremony for the Armed Force’s Covenant at Horseguards Parade in London. The signing was between the IRM and the Greater London Reserve Force’s and Cadet’s Association (GLRFCA).

Guests included IRM Board members. There were also representatives present from the Kent Army Cadet Force including Lieutenant Colonel Simon Dean OBE, Deputy Commandant Major Richard Phillips and Regimental Sergeant Major Pete Barnes. SO1 Lieutenant Colonel David Utting (head of engagement for the British Army) was also present and gave a brief message on partnering with defence.

The signing between the IRM and GLRFCA signifies an ongoing commitment to service leavers and personnel as laid out in the pledge.

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Socrates Coudounaris CFIRM (left), chairman of the IRM, and SO1 Lieutenant Colonel David Utting (head of engagement for the British Army)

Socrates Coudounaris CFIRM, chairman of the IRM, said: “It was a great privilege to be here today to co-sign the Armed Forces Covenant. It’s vitally important that the Armed Forces and businesses are mutually engaged. This signifies a wider pledge by the IRM to increase the risk management profession’s visibility to ex-military personnel. We provide accessible and relevant training and qualifications that will help ex-Armed Forces personnel in making the transition to the business world.”

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Lieutenant Colonel Simon Dean OBE and Captain Vicky Robinson (country PR for the Kent Army Cadet Force and head of marketing and communications at the IRM)

Coudounaris added: “Many of the skills learned by services personnel naturally cross over into the world of risk management and we’re keen to ensure these skills are recognised and that we can help support individuals’ lifelong learning and career transition where possible.”

Drew Jeacock, head of engagement for the GLRFCA, stated: “The Government is committed to supporting the Armed Forces community by working with a range of partners who’ve signed the Armed Forces Covenant. It’s a national responsibility involving Government, businesses, local authorities, charities and the public. Demonstrating commitment to the Armed Forces family is a significant gesture and I hope that the IRM will embrace the intent and values that we hold close to our core. We value the IRM’s support.”

*The IRM supports Captain Victoria Robinson, the organisation’s head of marketing and communications, who’s also the county PR officer for the Kent Army Cadet Force, with leave for annual camp and other cadet-related activities

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Institute of Risk Management holds inaugural Climate Change Symposium

Climate change is rising rapidly up organisational risk registers. That’s according to delegates who recently attended a Climate Change Symposium organised by the Institute of Risk Management (IRM) and hosted by Lexis Nexis.

In 2018, the IRM’s Risk Agenda 2025 project identified key risks for consideration, among them being the global response to climate change. The IRM’s 2018 report produced in tandem with the Cambridge Centre for Risk Studies, entitled ‘Perspectives of Global Corporations’, also acknowledged that climate change is a recognised risk area, although there was concern that it was seen as a long-term issue and not a short-term priority.

Recent global protests and the increased publicity across media outlets have brought climate change to the world’s attention. Businesses and society at large are becoming more aware of the effects to future generations, and corporations are being held to account and under increasing scrutiny to take their Corporate Social Responsibility agendas far more seriously.

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Over 60 delegates attended the Climate Change Symposium, which featured input from Alyssa Gilbert (director of policy and translation at the Grantham Institute for Climate Change), Vinay Shrivastava CFIRM (director of UK infrastructure risk at Turner and Townsend and an IRM Board member) and Clive Thompson CFIRM (deputy chair of the IRM and chair of the Interest Groups Committee).

Thompson stated: “It was great to see so many attending the climate change event and to have engagement in the breakout groups which produced some really good ideas. We’re developing a Climate Change Interest Group to take the initiative forward and will shortly be calling for volunteers who would like to become more involved in driving this important subject.”

Climate Change Essay Competition: the winners

Sam Brandom IRMCert (risk manager, Shawbrook Bank Limited)

“Businesses and financial institutions are the drivers of change in the global economy. Now is their chance to step up, inspire and lead from the front in tackling climate change by enacting a collective response. I was delighted to accept the prize for my essay and look forward to seeing the IRM’s further work in this field.”

Dr Jayne Matthews IRMCert (independent consultant)

“Climate change presents a threat to most businesses and local scale risk mitigation will no longer be enough for protection. Businesses have an opportunity for a more global approach to manage supply chain issues and those that embrace this are likely to be more successful. I’m delighted to receive the essay prize and look forward to being a part of the IRM’s future climate change initiatives.”

*The essays can be viewed online at: https://www.theirm.org/news/irm-holds-first-climate-change-symposium-and-announces-essay-competition-winners/

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Institute of Risk Management East Africa Regional Group partners with Serianu Ltd to grow local cyber risk talent

The Institute of Risk Management’s (IRM) East Africa Regional Group (a member body of the IRM in the UK) and Serianu Ltd have agreed to work together on addressing the huge deficit of qualified risk managers in the region coupled with local public and private sector organisations needing critical hand-holding to ensure risks and opportunities within organisations are effectively identified and managed.

The collaboration is bidding to develop a fundamental home-grown cyber risk management framework for the African context which aims to increase the number of competent risk professionals as well as enhance excellence in cyber risk management and reporting.

Serianu Ltd is a pan-African cyber security consulting firm. The business has signed a Memorandum of Understanding (MoU) with the IRM that will engender collaboration on research, training, community out-reach and policy design.

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According to Dorothy Maseke, chair of the IRM’s East Africa Regional Group, Kenya especially needs 1,000 qualified risk management professionals annually, yet over the last three years the population has grown from just under 20 to around 120 today.

“Risk management is a relatively new field of professional practice yet, locally and globally, there’s a major shift by regulators to entrench high risk management standards,” explained Maseke. “Risk has become a core reporting requirement by management as well as a key responsibility of Boards of Directors. For instance, Kenya’s public sector is guided by the Mwongozo Corporate Governance Code which sets out compliance parameters.”

New specialism

Maseke added that risk management had emerged as a new specialism as a result of changing business and public sector operating environments that have shone a spotlight on governance mechanisms. At the same time, the practice of risk management is increasingly credited with identifying great opportunities for innovation even as it seeks out issues that would derail any organisation from achieving its goals at any one time.

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Dorothy Maseke

Threats and opportunities have been a standard in every organisation’s overall strategy for several decades, but now for the first time in corporate governance history, this is firmly set in the risk manager’s scope of work and monitored daily. Maseke noted that, in this way, organisations are also able to clearly assess and derive the benefits from investing in their systems and processes.

Carol Misiko, the East Africa Regional Group’s secretary, added that cyber risk is no longer a back-office IT team issue (although they clearly play a vital role). Misiko noted that today’s enterprise risk management function needs to be able to understand this constantly evolving risk, but also manage, monitor and report on this emerging risk.

Common interest

Speaking during the MoU signing ceremony, Serianu Ltd’s CEO William Makatiani observed that the two institutions have a common interest in growing the knowledge of Boards of Directors and senior management so that they have a strong grasp on emerging events and issues that may affect their organisations.

“We’re collaborating with the Institute of Risk Management to give directors and managers tools and methods that empower them to have a better grasp of cyber risks and opportunities they can exploit,” stated Makatiani. He added that, generally – and especially so in the public sector – the degree of compliance is still quite low and that many highly regulated private sector organisations are yet to get to cross the 50% mark.

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Institute of Risk Management launches Regional Group focused on Belgium and Luxembourg

The Institute of Risk Management (IRM) has formed a Regional Group for Belgium and Luxembourg. The objective is to fill a gap in the Benelux market where there’s a lack of opportunity for risk management practitioners to network and learn from each other.

The all-new Regional Group will focus on connecting risk management professionals in the area and raising the profile of important risk management topics and developments within each industry represented.

Ultimately, the Regional Group will provide a forum for members from a diverse range of organisations, risk disciplines and sectors to network, exchange views and share Best Practice with peers on a local footing. Specifically, the Regional Group will host events and enable cross-industry pollination.

The initiative is to be run by senior risk professionals emanating from various industries including life sciences, financial services, risk advisory and construction. The chairman is David Lannoy (technical specialist at the IRM). The treasurer is Pierre Poncelet, with the new secretary being Kenneth Willems. The community manager for Belgium is Nicolas Renard, with this opposite number for Luxembourg being Simon Muir.

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David Lannoy informed Risk Xtra: “The Initial priority will be to attract members and build a network. We aim to host four events each year focused on relevant topics and aim to include contributions from high-profile international speakers with proven backgrounds in risk management activities. There will also be round table discussions with current IRM members to inform thought leadership and shape industry practice.”

Lannoy continued: “Aside from these specific activities, we’ll also aim to bring together IRM members in a friendly environment and encourage networking, spreading events across the region to increase the participation of willing professionals. We will bring members together who, in turn, will have the opportunity to share their own knowledge and experiences during events. The Regional Group will also look towards developing a risk talent incubator by reaching high-profile students and professionals through challenges to promote the profession.”

Socrates Coudounaris CFIRM, chairman of the IRM and risk management director at the RGA International Reinsurance Company, added: “We’re pleased to have the opportunity to launch this Regional Group with the support of experts. Our relationships with firms in the Benelux region have always been excellent and we welcome the opportunity to strengthen them further. Excellence in risk management requires a strong understanding of general concepts and techniques, but also an appreciation of the detailed risk landscape in particular sectors. This new Regional Group will help to enhance our interconnectedness.”

*Those professionals interested in joining the Regional Group should contact: marketing@theirm.org

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Institute of Risk Management forges alliance with Chartered Institute of Loan and Risk Management in Nigeria

The Institute of Risk Management (IRM) has signed a group affiliate scheme agreement with Nigeria’s Chartered Institute of Loan and Risk Management (CILRM).

The IRM is the leading global professional body for Enterprise Risk Management and currently has over 600 members across Africa, with active regional groups in Ghana, Kenya and South Africa. The organisation is currently in the process of setting up a group in Nigeria and Zimbabwe.

Legislation dictates that all companies over a certain size must have qualified risk management professionals in place in the region, highlighting the importance of risk management to the success of both organisations and the economy.

The scheme involves the CILRM purchasing 2,500 IRM group affiliate memberships which will then be allocated across the CILRM membership network. This means that the IRM’s counterparts can benefit from demonstrating their commitment to the risk management agenda by being part of a growing global network.

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Other membership benefits include events, qualifications, networking and access to online materials.

Dr Ian Livsey, CEO of the IRM, said: “This is an exciting development for both the IRM and the CILRM when it comes to strengthening the risk management profession in Nigeria and for us to work more strategically going forwards.”

Livsey added: “The IRM already had a great footprint in Africa, but this news cements the importance of the developing Nigerian market. We’re keen to progress the risk management profession globally and determined to raise the importance of enterprise risk at Board level.”

Dr Sir Oladipupo A Bailey, president and chairman of the Governing Council of the CILRM, responded: “The signing of the Memorandum of Understanding with the IRM will not only strengthen the working relationship between the two bodies, but will also go a long way towards creating awareness of risk management’s importance for the Nigerian economy, both in the private and public sectors.”

He continued: “This is another milestone achievement for the CILRM and the IRM in terms of growing and developing the profession, especially in the areas of resource enhancement and capacity building.”

*The IRM has recently launched The Big Debate, which is a series of global events, interviews and a survey designed to find out more about the Risk Agenda 2025. Click here https://www.theirm.org/risk-agenda-2025.aspx for details

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Institute of Risk Management experts outline key risk areas for 2015

Political instability caused by low oil prices, increased shareholder activism and the business threat posed by a potential UK exit from the EU are among the chief concerns voiced by some of the UK’s leading risk experts for 2015.

As 2014 draws to a close, members of the Institute of Risk Management (IRM) were asked to identify key risk areas for 2015. A broad range of oil and gas, political, healthcare, regulatory and insurance risks were highlighted as potential flashpoints.

Oil and Gas

“The lower oil price will raise a number of risks, including political and social disruption in oil producing countries which, if not successfully managed, will impact on the world,” asserted Mark Boult, Fellow of the IRM and director at risk management consultancy DNV GL.

Boult continued: “Given the greater financial pressure we will see on the sector next year, stakeholders need to maintain their focus on the integrity of assets. Not doing so will deliver poorer reliability and increase the risks of a major accident. Industry and Governments should work together to proactively manage down the commercial pressures and risks facing the industry from the oil price drop.”

A catastrophic major accident and physical asset integrity will remain a major industry focus for next year. “Such events are always – and always need to be – at the front of our minds given the impact they have on people, the environment and the business of the industry as a whole,” explained Boult.

Commentators from the IRM have mapped out key potential risks for 2015

Commentators from the IRM have mapped out key potential risks for 2015

Politics

An uncertain political environment in the UK is highlighted as a key risk area for next year by IRM members. “We need to watch closely how the dialogue between the UK and EU develops,” said José Morago, IRM chairman and group risk director at Aviva. “The potential risk of a UK exit from the EU could bring about even bigger strategic, operational and legal risk challenges to many international companies than those raised by Scottish independence.”

Morago added: “Next year, we have the UK General Election and possible presidential elections in Europe. With continuing fiscal deficits, cost of living pressures, low investment returns and low public trust in financial institutions, there’s a real risk of further – and bolder – political announcements as parties compete for public approval.”

Mark Butterworth, member of the IRM and managing director at risk management consultancy Condie Risk, believes the unpredictability of next year’s UK General Election is unique in his adult memory. Butterworth argues that a vote to leave the EU could provide the Scottish National Party with a boost, “possibly leading to the start of the ‘second’ wave for independence.”

Alternatively, an indecisive result in a May election which fails to resolve ‘the European question’ could lead to “upheaval, forcing a second General Election in late 2015, with all the attendant uncertainty that entails.”

Healthcare

The total number of Ebola deaths is predicted to peak in 2015 according to Patrick Keady FIRM, risk leadership consultant with the NHS. “This will be achieved by continuing with current levels of awareness, actions and plans and by Governments avoiding ineffective knee-jerk reactions. Lessons will be learned from Sierra Leone’s handling of the crisis where 21% of people infected died compared to 60% in Guinea and 42% in Liberia.”

Further 2015 predictions by Keady are as follows:
• “It will be the year more people will say ‘No’ to so-called ‘healthy food’, leading to reduced demand for healthcare in the long term. People can consume up to seven times the World Health Organisation’s daily recommended amount of sugar when their diet is limited to foods such as low fat yoghurts, muesli bars and sports drinks. The debate about processed versus natural food will escalate with the launch of ‘That Sugar Film’ next year.”
• “Drugs and alcohol will both start to be seen as healthcare issues. With 9% of all emergency hospital care being for people with a drug or alcohol problem, 36% of these are from the most disadvantaged neighbourhoods. An increased focus on the health implications of drugs and alcohol will start to benefit the population and, in turn, reduce drug and alcohol-related crime statistics.”

Regulation

According to IRM commentators, new regulation is going to pose risks for companies and company directors in 2015.

Taken together, the 2014 UK Corporate Governance Code and Financial Reporting Council’s Guidance on Risk Management will significantly upgrade the weaponry of shareholder activism in 2015. “Greater corporate governance and risk management education at Board level – including Company Secretaries – will be needed to mitigate against the risk posed by the new regulatory environment,” stated Mark Butterworth.

The Financial Conduct Authority’s drive for greater competence and capability means that Boards of Directors must be far more proactive about ensuring their capabilities match their needs. José Morago commented: “Boards need to identify governance gaps and plug them fast, whether that’s through acquiring new skills, qualifications or experience. What’s expected from Boards is going to be raised quite fast next year.”

Insurance

Reduced profitability for the UK insurance sector is an identifiable risk for 2015 according to Enrico Bertagna, IRM affiliate and senior vice-president of business development at Allied World Europe Insurance.

“If there’s no material change in claims trends or major catastrophes,” outlined Bertagna, “we’re looking at ongoing downward pressure on premium rates, reducing underwriting profits in most classes of business.”

Bertagna also believes we’re likely to see a trend towards the localisation of risk in 2015. “We’ll see less premium flowing to London from emerging markets. That will lead to reduced premium to London market insurers on the one hand, while potentially exposing local market insurers to greater volatility on the other.”

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“Ticking boxes will not prevent the next Rana Plaza” states the Institute of Risk Management

According to a new report published by the Institute of Risk Management, businesses responding to supply chain scandals with additional rules and regulations leave workers even more vulnerable.

The Institute of Risk Management (IRM) report entitled ‘Extended Enterprise: Managing Risk in Complex 21st Century Organisations’ argues that the ‘modern commercial obsession’ with systems and processes obscures the real problem – failure to understand and predict human behaviour and build trust.

The report urges companies to prioritise behavioural risk over ‘tick box compliance’ in order to tackle the ethical uncertainties present in today’s complex delivery networks.

Peter Neville Lewis – one of the report’s authors and an IRM member – explained: “Ticking boxes is easy – and dangerous. Boxes were ticked at Rana Plaza, in Rotherham and at BP. Developing a sophisticated understanding of ‘personal risk management’ may be a somewhat harder task but, as companies as diverse as John Lewis and Tata Industries have shown, it does help to create the ethical behaviour that controls risk across an organisation however big or complex the operation may be.”

Back in August, a Chartered Institute of Purchasing and Supply survey of UK businesses revealed that nearly 75% of supply chain professionals admitted to having ‘zero visibility’ of the first stages of their supply chain. Shockingly, 11% acknowledged it was ‘likely’ that slave labour was used at some point in the process.

Human cost of wilful blindness

The IRM’s technical director Carolyn Williams – who authored the new report – pointed out: “This is the human cost of wilful blindness in extended enterprise risk. It’s time businesses stopped expressing remorse and started tackling the behavioural uncertainties at every stage of their operations.”

Shareholders have a direct interest in whether a company takes a tick box or behavioural approach to organisation-wide risk management. A 2013 report published by the World Economic Forum highlighted the fact that significant supply chain disruption cuts the share price of affected companies by an average of 7%.

The IRM report entitled 'Extended Enterprise: Managing Risk in the Complex 21st Century Organisations' finds that businesses which respond to supply chain scandals with additional rules and regulations leave workers even more vulnerable

The IRM report entitled ‘Extended Enterprise: Managing Risk in the Complex 21st Century Organisations’ finds that businesses which respond to supply chain scandals with additional rules and regulations leave workers even more vulnerable

‘Extended Enterprise: Managing Risk in Complex 21st Century Organisations’ marks the transition from risk management of a single organisation to a coherent programme which meets the global and interdependent challenges of today’s joint endeavours.

Made up of IRM practitioners together with academic experts, the report’s project group has skilfully developed models, tools and techniques to help risk practitioners understand and manage risk across extended enterprises.

“Today’s extended enterprise environments achieve amazing outcomes but also display many of the characteristics of complex systems, with all of the potential for volatility and uncertainty that implies,” continued Williams. “By modelling the extended enterprise in practice, we provide risk practitioners with the tools such that they can begin to understand organisational exposure to extended enterprise risks – wherever in the chain they may be.”

Williams went on to comment: “By their very nature, complex systems cannot be managed or controlled. However, they can be influenced so, in terms of the future risk manager, this will demand new skills around leadership and when it comes to the understanding of culture, ethics and behaviour.”

Methodologies and tactics for addressing risk

The report offers recent multi-agency examples to demonstrate why there should be concern around extended enterprises. These include the scandal in the UK when horsemeat appeared in some beef supply chains, the management by some banks of their outsourced IT providers, failures in care homes and child protection in the UK and the tangle of responsibilities that became evident following the Macondo well disaster in the Gulf of Mexico.

As well as supporting organisational performance, the IRM report claims that a better understanding of risk across the extended enterprise is also vital in tackling wider problems such as slavery, abuse, environmental damage and dangerous working conditions. The report argues that wilful blindness by organisations to these issues within their broader networks is unacceptable.

Put simply, companies must now ask themselves whether any claims that they make about their values hold true across their extended enterprise.

Richard Hibbert – CEO of cloud-based Governance, Risk and Compliance (GRC) solutions provider SureCloud (who sponsored the report) – stated: “This is a thought-provoking study which highlights the risks posed by relationships across extensive networks of suppliers, partners and associates. It also offers methodologies and tactics for addressing risks and harnessing the benefits.”

*The new report was officially launched at a conference held at Cass Business School in London on Thursday 9 October

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