ENSURING FUTURE SUCCESS AGAINST THE GROWING ARRAY OF RISKS
Two messages to come out of our research are that resilience is much more than just an issue of compliance, important as that may be. And a truly resilient company can only come about where the board and risk professionals work together, in complementary roles, to foster the necessary culture and behaviour.
‘Roads to Resilience’ is a follow-up to the highly influential ‘Roads to Ruin’ report from Cass Business School, published by Airmic in 2011. That research found common themes running through nearly all 18 case studies of corporate failure, regardless of business sector. Our latest investigation asked whether resilient companies also have qualities in common and, if yes, how they could be achieved.
Researchers from Cranfield School of Management interviewed senior people with risk responsibilities, including CEOs, at eight successful organisations. They found that, apart from the obvious risk management benefits, resilience enables companies to be successful in all sorts of other ways. Resilient organisations are more responsive to their customers and the markets they serve; their staff and suppliers are motivated and loyal; they gain trust by being more dependable; and their reputations benefit as a result.
Resilient companies do not just happen. They have cultural and behavioural traits that encourage companies to be flexible, customer-focused and alert to danger. Conventional risk controls are essential to achieving these attributes, but are not enough on their own. The lead in creating the necessary risk culture has to come from the very top.
Apr-Jun 2014 Issue