INTEGRATED RISK MANAGEMENT – THE NEXT FRONTIER OF ORGANISATIONAL RISK
R&C: Why is it important for the board and senior management to view risk governance as a priority?
Granat: Most organisations subscribe to the ‘three lines of defence’ model, and while much has been written about its efficacy, the first line of defence of putting tactical risk management in the hands of individual business functions, is more important than ever. Given that today’s organisations operate in a more change-heavy, complex and connected environment, risk has to be overseen at a board level. With a seismic shift in the consciousness of consumers, thriving in this complex world means adopting a risk-aware strategy. Risks can no longer be operational in scope – business risks have become existential brand risks. Under this new culture of transparency and accountability, there is a demand for a higher level of responsibility from chief executives. Still reeling from the financial and economic crisis of the past 10 years, the public is now holding businesses personally accountable. The mounting thunder of ‘Tweetstorms’ and other viral social media content is making brand reputations and executives vulnerable like never before, exposing outdated organisational cultures and their disconnected leaders. Trust is at the forefront of this new era we are in, defined by complex relationships with employees, customers and suppliers. Fostering a strong ethical culture is more than a responsibility for business today; it is the only way organisations can build a sustainable competitive advantage.
Oct-Dec 2018 Issue