Ramón KURI
Pioneering Tech-Driven Future of Risk Management
Manypeopleseeriskmanagementasawaytoprotect themselves,butit'sactuallyaproactiveapproachinbothlife andbusiness.Atitsessence,riskmanagementisabout shieldingourselvesfromtheunpredictablebehaviorsofotherswhile alsosharpeningourowndecision-makingabilities.
Intoday'sinterconnectedworld,ourdestiniesarecloselylinkedtothe choicesmadebythosearoundus.Customerscanquicklyshifttheir preferences,competitorsmaylaunchgroundbreakingtechnologies,and regulatorsmightintroducenewpolicies.
Theseexternalfactorscanhaveasignificantinfluenceonourgoalsand strategies.Asthesayinggoes,"Thebestwaytopredictthefutureisto createit."Thisadageholdsparticularlytrueforleadersinrisk management,whoaretaskedwithmanagingthe uncertainwatersofthebusinessworld.
Building
a RiskR e a yd
Currently,effectiveriskmanagementis crucialfororganizationalsuccess. Leaderswhoexcelinthisfield possessauniqueblendofskillsand traitsthatenablethemtonavigate uncertaintyandprotecttheir organizationsfrompotential threats.
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Firstly,topriskmanagement leadersdemonstrateexceptional analyticalabilities.Theycan quicklyassesscomplex situations,identifypotentialrisks, anddevelopcomprehensive mitigationstrategies.Thisinvolves notonlyunderstandingimmediate threatsbutalsoanticipatingfuture challengesthatmayarisefromevolving marketconditionsorregulatorychanges.
Communicationskillsareequallyvital.Theseleadersmustarticulate riskassessmentsandmitigationplansclearlytostakeholdersatall levelsoftheorganization.Theyserveasbridgesbetweentechnical expertsandexecutivedecision-makers,translatingcomplexriskdata intoactionableinsights.
Successfulriskmanagementleadersalsoexhibitadaptabilityand resilience.Inarapidlychangingbusinessenvironment,theymustbe preparedtoadjuststrategiesquicklyandlearnfrombothsuccessesand failures.Thisflexibilityallowsthemtostayaheadofemergingrisks andcapitalizeonnewopportunities.
InourlatesteditionofInsightsSuccess, "10 Most Inspiring Leaders in Risk Management," wecelebratethevisionarieswhoaredirectingthe domainofriskmanagement.Theseleadersexemplifythequalities necessarytobuildtrulyrisk-readyorganizations.
Have a good read ahead!
Chris an Stenbeck
Head of Business Development
Donald Rome
Chief Risk Officer
Fernando Dyer
Corporate Chief Risk and Compliance Officer
Gagandeep Dhinsa
Chief Risk Officer
Jamie Mallinder
Chief Risk Officer
Ramón Kuri
Global Chief Risk Officer
Sharmyn Powell
Chief Risk Officer
Sophie Dupré-Echeverria
Chief Risk and Compliance Officer
Viney Chadha
Chief Risk Officer
Wenyan Wu
Chief Risk Officer
i neraspa.it Company
I nera
Cen er Bank cen er.com
Grupo UNACEM unacem.com
Chris an Stenbeck is a dynamic business development professional who excels in iden fying growth opportuni es and fostering strategic partnerships in the infrastructure sector
Donald Rome is an experienced risk management professional, recognized for his analy cal skills and commitment to enhancing risk frameworks in the banking industry
Fernando Dyer brings a wealth of knowledge in corporate risk management, focusing on compliance and strategic ini a ves to enhance organiza onal resilience and opera onal effec veness.
BVD Group bvdpetroleum.com
Collar Group collar.group Alea ca alea ca.com
Eastern Caribbean Central Bank eccb-centralbank.org
GIB Asset Management gibam.com Moody's Investors Service moodys.com
Reach Financial reach.com
Gagandeep Dhinsa is a proac ve risk management professional, recognized for his exper se in compliance and dedica on to fostering a resilient organiza onal culture.
Jamie Mallinder is a skilled risk management professional, celebrated for his analy cal mindset and ability to foster a proac ve culture of risk awareness within organiza ons.
Ramón Kuri is a seasoned risk management expert from Mexico City, known for his innova ve approach and commitment to integra ng risk strategies across diverse organiza onal frameworks.
Sharmyn Powell is a commi ed leader in risk management, known for her strategic vision and ability to navigate complex regulatory environments effec vely
Sophie Dupré-Echeverria is a dedicated professional with extensive experience in risk and compliance, recognized for her strategic insights and collabora ve leadership in the financial sector
Viney Chadha is a knowledgeable risk management expert, celebrated for his analy cal approach and dedica on to fostering a culture of compliance and risk awareness.
Wenyan Wu is a strategic thinker in risk management, known for her innova ve solu ons and commitment to enhancing financial stability and opera onal efficiency
C O V E R
S T O R Y
Ramón Kuri
Pioneering Tech-Driven Future of Risk Management
A R T I C L E S
Understanding Risk Assessment: Tools and Techniques for Success Top Strategies for Identifying and Mitigating Risks in Business
16. Christian Stenbeck The Green Dilemma: Can Construction Truly Be Sustainable?
Fernando Dyer Leveraging Data for E ective Risk Navigation
Jamie Mallinder
Rede ning Risk Management Landscapes
Sophie Dupré-Echeverria
Charting the Course for Financial Resilience
Sharmyn Powell Your Comprehensive Guide to Optimum Risk Management with Innovative Strategies 48. Challenges of Third-Party Risk Management and How to Overcome Them
Ramón
Pioneering Tech-Driven Future of Risk Management
Life is full of challenges, and every experience has helped me to learn and grow. I would summarize it this way: Humility, trusting one another, empowering people, and being thankful to your team members and colleagues.
Ramón Kuri
Alea ca Global Chief Risk Officer
Empowering Innovation in Risk Management!
Intherealmofglobalriskmanagement,the transportationinfrastructureindustrystandsasa dynamicfrontierwherechallengesaremetwith innovativesolutionsandunwaveringcommitment.This narrativeunveilsthejourneyofavisionaryleader, navigatingthisindustry’sintricatelandscapeandforginga pathtowardasafer,moresustainablefuture.
MeetRamónKuri,aseasonedprofessionalwithawealth ofexperienceinriskandinternalcontrols.Hisjourneyfrom academiatoautomotivefinance,andlatertothe distinguished“BigFour”accountingfirms,laidthe foundationforhispivotalroleastheGlobalChiefRisk OfficeratAleatica.Throughyearsofdedication,Ramón hashonedtheskillsnecessarytoseamlesslyintegraterisk managementcapabilitiesintodiverseorganizational frameworks.
AtAleatica,aglobalplayerintransportationinfrastructure, Ramónspearheadsthedevelopmentofacomprehensive riskmanagementprogram.Thisprogram,implemented acrossmultiplecountries,unifiesriskpractices,and strengthensthecompany’soperationalefficiency.Witha significantpresenceinLatinAmericaandEurope, Aleatica’smissionunderRamón’sleadershipisto revolutionizetheindustry,oneriskatatime.
ThisnarrativenotonlycelebratesRamónKuri’s transformativeleadershipbutalsoilluminatesAleatica’s commitmenttoshapingasafer,moresustainable transportationlandscape.
Join us on this compelling journey as we explore the dynamic intersection of risk management, innovative mobility, and global impact!
FromMexicoCitytoGlobalRiskManagement
RamónKuri,theGlobalChiefRiskOfficeratAleatica, hailsfromMexicoCity.Followingthecompletionofhis BA,hepursuedamaster’sprograminbusiness administrationwithaspecializationinfinanceatthe UniversidadAnahuac.Followinghisacademicpursuits, Ramóntransitionedintothefinancialdepartmentofan automotivecompany.Soonafter,heembarkedonanew journeywithoneoftherenowned“BigFour”accounting firms,whereheundertooktheresponsibilityofleadingthe developmentofinternalauditcapabilities.
Overtheyears,RamónKurihasdemonstratedacontinuous commitmenttolearningandrefiningskillscrucialtorisk
andinternalcontroloperations.Hehasheldvariousroles andpositions,enablinghimtoassistnumerous organizationsinseamlesslyintegratingandingrainingrisk managementcapabilitiesintotheiroperationalframework andbusinessdecision-makingprocesses.Throughthese endeavors,Ramónhascollaboratedwithprofessionalsatall managementlevels,frommid-levelmanagerstoC-suite executivesandboardmembers.Thisextensiveexperience hasuniquelyqualifiedhimforthepivotalroleofChiefRisk OfficeratAleatica.
FosteringaCultureofProactiveRiskManagement
Duringhiscollegeyears,RamónKuriventuredintothe hospitalitysector,aperiodthatinstilledinhimenduring principlesguidinghisapproachtovariousaspectsoflife: collaboration,discipline,andintegrity.Presently,heapplies thesefoundationalprincipleswithinhisteam,encouraging themtoproactivelyidentifypotentialrisksonthehorizon. Heemphasizestheimportanceoftakingownershipand fosteringaccountabilitytoaddressthesechallenges effectively
WithinAleatica,RamónKurihasimplementedastructured periodicreviewprocess.Thisinvolvesengagingin thoroughdiscussionsandevaluationswithinternalrisk ownersacrossvariousBusinessUnits.Thesesessionsare dedicatedtomonitoringthestatusofresidualrisksandthe progressofmitigationplans.Ramónplacesgreatemphasis onopenandcandidconversations,fosteringanenvironment wherehisteamcollaboratesseamlessly.Byworking alongsidehisteammembers,heensuresalignmentand unityofpurposeinmanagingriskseffectively
ChartingaVisionforIntegratedRiskManagementat Aleatica
SincejoiningAleaticain2019,RamónKurihasembarked onatransformativejourney.Leadingtheriskmanagement effortsforaglobalcompanywithasignificantpresence acrossLatinAmericaandEuropehasbeenaninvigorating challenge.AtAleatica,acompanyfocusedontheoperation oftransportationinfrastructure,Ramónseizedthe opportunitytopioneerthedevelopmentofacomprehensive globalriskmanagementprogram.Heinitiatedthisprogram fromthegroundup,establishingaunifiedlanguageanda cohesiveapproachtoeffectivelyhandlerisksandcapitalize onopportunities.Thisprogramhasbeeninstrumentalin harmonizingriskmanagementpracticesacrossAleatica’s businessunitsinthesevencountriesofoperation,namely theUK,Italy,Spain,Mexico,Colombia,Chile,andPeru.
Over the years, Ramón Kuri has demonstrated a continuous commitment to learning and honing skills crucial to risk and internal controls.
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UnderRamón’sstewardship,Aleaticahasmadesignificant stridesinelevatingitsriskmanagementcapabilitiesona globalscale.
Aleatica,underthestewardshipofitscontrolling shareholder,IFMInvestors,hasdemonstratedremarkable prowessininfrastructuremanagement.IFMInvestors,an esteemedAustralianinvestmentfundspecializingin infrastructure,overseesastaggeringportfolioofassets exceeding$143billiondollarsonaglobalscale.Atpresent, Aleaticaefficientlymanagesanextensiveportfolio, including16highways,twocommercialports,alight railway,andanairport.RamónKuri’sstrategicproximityto variousbusinessunitsandfunctionaldepartmentshas playedapivotalroleinensuringseamlessoperations.
Throughcontinuousmonitoringandtheimplementationof regulartrainingprogramsatallorganizationallevels, Aleaticahassolidifieditscommitmenttothesafetyof employeesanditsinfrastructureusers.Thisdedicationnot onlyupholdstheirwell-beingbutalsoaugmentstheoverall operationalefficiencyofthecompany.Thecollectiveefforts ofAleatica,drivenbyRamónKuri’sleadership,have undoubtedlycontributedtothecompany’ssuccessandits standingasastalwartintheinfrastructuremanagement sector
SafetyservesasthecornerstoneofAleatica’soperations, underpinningitsunwaveringcommitmentsinceits inception.Thecompanyisresolutelyalignedwiththe SustainableDevelopmentGoals(SDGs)andtheSecond DecadeforRoadSafety2021-2030.Aspartofthis commitment,Aleaticahassetarobusttargettoreduce,by 2030,roadfatalitiesby50%ontheroadsunderitspurview Toachievethis,thecompanyhasallocatedasubstantial globalinvestmentof$134millioneurosfortheperiodof 2020-2024.CentraltoAleatica’sRoadSafetyStrategyis theimplementationoftheAccidentReductionProgram (PRA).Thisprogramplacesstrategicemphasison managingthethreecriticalriskfactorsassociatedwithroad transportation:infrastructure,driverbehavior,andvehicle conditions.Throughtheseefforts,Aleaticanotonly demonstratesitssteadfastdedicationtoroadsafetybutalso playsapivotalroleinshapingasaferandmoresecure transportationlandscape.
Consolidatingateamofexperiencedprofessionalshasalso beencriticalforRamónKuritoensurepotentialrisksare identifiedandpreventedfromescalatingintocrises.Risks associatedwithenvironmental,social,andgovernance criteriahavebeenseamlesslyintegrated,accompaniedby thedevelopmentofmanualstoidentifyandevaluate physicalriskslinkedtoclimatechangeandtransitionalrisks inday-to-dayoperations.Theemphasisonprevention underscorestheircommitmenttoavertingtheescalationof risks.
Furthermore,promotingriskawarenesswithinthe organizationhasbeenanimportantinitiativeledbyRamón Kuri.Throughsuccessfultrainingandcommunication projects,hehasempoweredcolleaguestoidentifyand communicatepotentialriskseffectively.Inthepastyear,the additionof“OpportunityManagement”totherisk managementframework,complementedbyadedicated 13,200hoursoftrainingtoemployees,reflectsRamón Kuri’sdedicationtocultivatingacultureofproactiverisk managementandcapitalizingonopportunitiesforgrowth andimprovement.
FosteringSustainableImpact:Aleatica’sApproach
AtAleatica,riskandopportunitymanagementconstitutean ever-evolvingprocess.Eachyear,thecompanyconductsa thoroughreviewofitsriskprogram,ensuringalignment withorganizationalobjectivesandcompliancewiththe requirementsofbothinternalandexternalstakeholders.
Theintegrationoftheriskmanagementprocesswith Aleatica’smaterialitystudiesplaysapivotalroleinsteering thecompany’sESGstrategy Thesestudiesserveasa crucialtoolforidentifyingthepressingneedsof communitieswhereAleaticaoperates,aswellasevaluating otherpertinentenvironmentalandcorporategovernance issues.
Derivedfromtheinsightsgleanedthroughmateriality studies,AleaticahasformulateditsStrategicSustainability Plan.
Aleatica demonstrates its steadfast dedication to road safety but also plays a pivotal role in shaping a sustainable transportation landscape.
Thiscomprehensiveplanencompassesspecificcommunity outreachinitiatives,strategiesforadaptingtoclimate change,measurestoreducegreenhousegas(GHG) emissions,enhancementsinenergyefficiency,and initiativesforbiodiversityconservation,amongotherkey areas.ThisapproachunderscoresAleatica’scommitmentto sustainablepracticesanditsdedicationtocreatinga positiveimpactonbothlocalcommunitiesandthe environment.
AleaticaincorporatesESGfactorsintoitsriskanalysis, enablingproactivemeasuresinriskmitigation,ensure regulatorycompliance,andfosterstrongertieswiththe communitiesinwhichitoperates.Thisapproachservesthe dualpurposeofmeetingtheexpectationsofbothinvestors andclientswhilereinforcingAleatica’scorepillarsof prioritizingsafety,upholdingcorporateintegrity,and championingsocialandenvironmentalsustainability Asanillustration,Aleaticaisspearheadingaprojectthat willestablish30newpollinatorgardensinpublicschools acrossMexico,fundedbythelatestroundoftheIFM InvestorsCommunityGrantsProgram.Thesegardens, composedexclusivelyofindigenoussucculentplants,will bedesignedinthelikenessofcrucialpollinatingcreatures likehummingbirds,bees,bats,andbutterflies.Theinitiative aimstoeducateandinstillanappreciationforthevitalrole ofpreservingbiodiversity,encompassingbothfloraand fauna,whileemphasizingtheimportanceofadvocatingfor soilconservationandresponsiblewaterconsumption.The projectalsoadvancesthesustainablemanagementof recyclablesolidwasteandorganicmatter
Throughproactiveengagementwithstakeholdersinthe communitiesitserves,Aleaticatakesstrategicstepsto mitigaterisks.Thisincludesactivelisteningtoindividuals whomayhaveconcernsorsuggestionsforenhancing operations,ultimatelycontributingtothereductionofsafety risksontheroads.Byadoptingaproactivestancetowards socialandcommunityengagement,Aleaticaeffectively minimizesriskswhilesimultaneouslyenhancing opportunitiesforpositiveoutcomes.
CollaborativeEmpowerment
Intheirleadershipapproach,collaboration,empowerment, andeffectivecommunicationtakeprecedence.They activelypromoteopenchannelsofcommunication, ensuringthatriskownersandteammemberscanidentify potentialrisksanddeliberateonappropriatemitigation strategies.
Empowermentisacornerstoneoftheirleadershipstyle. Theyfirmlybelieveingrantingtheirteammembersthe
autonomytotakechargeoftheirresponsibilities,lead initiatives,andmakeinformeddecisions.Byprovidingthe necessaryresourcesandunwaveringsupport,theyfosteran environmentwhereindividualscanthriveandexcelintheir roles,trustingthemtodeliverresults.
Maintaininganopen-doorpolicy,theycreateanatmosphere wherecolleaguesfeelateasesharinginsightsand addressingconcernsrelatedtoriskmanagement.This inclusiveapproachhasproveninstrumentalincultivatinga positive,risk-awarecultureacrosstheorganization.They havewitnessedfirsthandhowtheseelementsworkin tandemtofortifytheorganization’sriskmanagement practices.
Aleatica’sControlCenters:EnsuringSafetyand Security
Inthecountriesofoperation,Aleatica’sControlCenters playapivotalrole.Notably,inMexico,wheretheyoversee achallenging117-kilometerroadknownasCircuito ExteriorMexiquense,securityisofparamountconcern.The ControlCenterhereboastsoneofthemostadvancedrisk managementsystems,equippedwithalmost100cameras capableofidentifyingawidespectrumofissues,fromatoll roaduserexperiencingaflattiretopotentialsecurity breaches.
Theinsightsgleanedfromtheseobservationsserveasthe foundationforfuturestrategiesrelatedtosecuritymeasures andclientserviceenhancements.Additionally,Aleaticahas establishedweatherstationstomonitorclimate-relatedrisks andimplementedspeedcamerastoheightenuser awareness,regulatespeeds,andelevateoverallsafety standards.
Notably,Aleatica’semergencyresponsecoordinationin Mexicosurpassestheresponsetimeof911services.Ina proactivemove,Aleaticacollaboratescloselywithlocal authorities,aligningeffortstoaddresssecuritychallenges. ThiscollaborativeapproachensuresthattheStateof Mexico’spoliceforcehasseamlessaccesstotheCenters’ camerafeeds,enablingswiftassistancetousersinneed.
FosteringTrust,Compliance,andCybersecurity
Aleaticaupholdsintegrity,transparency,andcorporate governanceasfundamentalpillarsthatunderpinitsbusiness operations.Thecompanyisdedicatedtobeingviewedby itsstakeholders-includingcustomers,clients,employees, suppliers,allies,governments,andcommunities-asa dependable,consistent,andvalue-drivenpartner.
Through continuous monitoring and the implementation of regular training programs at all organizational levels, Aleatica has solidi ied its commitment to the safety of its infrastructure users and employees.
Aleaticadrawsonthesupportandexpertiseofits controllingshareholder,IFMInvestors,anadherenttothe UnitedNationsPrinciplesforResponsibleInvestment, whichactivelyoverseesthecompany’soperations.
Foreveryinfrastructureprojectundertaken,Aleatica meticulouslyfollowsclearandappropriateproceduresto securemunicipal,state,federal,regional,national,and communitypermits.Notably,in2022,thecompanyandits employeeswerenotsubjecttoanyadverserulingsinlegal cases,sanctions,fines,orsimilarmattersrelatedto licensing,corruption,unfaircompetition,ESG-related issues,orhumanrightsviolations.
AleaticahasimplementedarobustCybersecurity Frameworkrootedinthe NIST-CSF (National Institute of Standards and Technology Cybersecurity Framework). This frameworkprovidesastructuredapproachtomitigatingthe risksassociatedwithcybersecuritythreatsthatcould potentiallycompromiseinformationsecurityordisrupt businessoperations.In2022,thecompanyrecordedatotal of205eventsandthreecybersecurityincidents;itisworth notingthatnodatabreachesoccurredduringthisperiod.
Forward-ThinkingApproach
Aspartofitsriskawarenessinitiatives,Aleaticahas incorporatedanemergingrisktrainingprogramforallits BusinessUnits.Thisprogramprovidesaplatformforrisk ownerstoengageindiscussionspertainingtomediumand long-termrisks,ultimatelyleadingtothecreationofa watchlistforvigilantmonitoring.
Tech-DrivenRiskManagement:FutureStrategies
Thefutureofriskmanagementissettointegrateadvanced technologies,withaparticularemphasisonArtificial
Intelligence,highlightingresilienceandaproactiverisk managementapproach.Forinstance,AIsystems demonstratethecapabilitytorapidlydetectaccidents,often anticipatingcallstoemergencyservicesbydrivers. Furthermore,theutilizationofhistoricaldataenablesthe predictionoftrafficpatterns,aidingintheplanningof specialeventsandroadmaintenance.Byembracingthese progressivetrends,organizationsarebetterequippedto navigateriskeffectively,avertingcostlydisruptions.
It’scrucialtoacknowledgethatriskmanagementisan ongoing,dynamicprocessthatrequiresconsistentvigilance andengagementfromeverymemberoftheorganization. Giventhecontinuallyevolvingrisklandscape,regular reviewsandupdatestotheriskmanagementprogramare imperative.Lookingahead,thereisanticipationand enthusiasmfortheevolutionofriskmanagementpractices, withastrongcommitmenttocontributingtothis transformativejourney
- Roy T. Bennett
Christian Stenbeck | Itinera
10 Most Inspiring Leaders in Risk Management
Inaneraofclimatecrisis,the constructionindustryfacesa monumentalchallenge.Howcanit meetthegrowingdemandfor infrastructurewhilesimultaneously reducingitsenvironmentalimpact? Thesectoraccountsfornearly40%of globalCO2emissions,andasurban populationsswell,thepressuretobuild more—andbuildgreen—intensifies.
Thischallengeisparticularlyacutein theNordiccountries,wherestringent environmentalregulationscollidewith ambitiousdevelopmentgoals. Companiesmustnavigateacomplex landscapeoflocallaws,international standards,andrisingpublic expectationsforsustainablepractices. Theneedforinnovativesolutionshas neverbeenmorepressing.
EnterChristianStenbeck,Headof BusinessDevelopmentfortheNordic countriesatItinera,aleading constructionfirm.Withadiverse backgroundspanningIT,law, internationalrelations,and management,Stenbeckbringsa multifacetedapproachtothiscomplex problem.
"Sustainabilityisn'tjustabuzzword; it'sthefoundationofourfuture success,"Stenbeckasserts.Witha strategytointegratesustainable practicesintoeveryaspectofItinera's operationswhiledrivingcompetitive growth.
Stenbeck'sapproachinvolvescareful marketanalysis,strategicpartnerships, andriskmanagementtailoredtothe uniquechallengesoftheNordicregion. Byprioritizingsustainablegrowthand staying"onestepaheadofthe competition,"heaimstoposition Itineraasthemostcompetitiveplayer inkeyareas.
Astheconstructionindustrygrapples withitsenvironmentalimpact,leaders likeStenbeckareprovingthat sustainabilityandprofitabilitycango
handinhand.HisvisionforItinera's Nordicexpansionmaywellsetanew standardfortheindustryatlarge.
Below are the interview highlights:
Canyoushareinsightsintoyourrole astheHeadofBusiness DevelopmentforItinerainthe Nordiccountries?Howdoesrisk managementplayapartinyour day-to-dayresponsibilities?
InmyroleasHeadofBusiness DevelopmentforItineraintheNordic countries,Iserveasthestrategicarm ofheadquarterswiththeresponsibility toanalyze,select,andfine-tune markets,projects,clients,andpartners toensurethecompany'spositive development.Riskmanagementplays acriticalpartinmydaily responsibilities,asIcontinuously calculateandassessrisksineverystep oftheway
ThismeansthateveryactionItake representsthecompany24/7in NorthernEurope.Myrolerequiresme tostayonestepaheadofthe competition,alwaysstrivingtobethe mostcompetitiveplayerintheareasof highestrelevance.Thisinvolves makingdecisionsbasedonrisk assessmentsandsuccessfulrisk managementprocedurestoincrease ourrevenueandmaximizeprofit.
Riskmanagementisacomponentof yourworkbutnotthecorefocus. Couldyouelaborateonhowrisk assessmentandmanagementare integratedintoyourbusiness developmentprocesses?
Riskassessmentandmanagementare integratedintoourbusiness developmentprocessesthrougha structuredapproach.Positive developmentintoandwithinnew marketsisdrivenbyriskassessment findingsandsubsequentrisk managementstrategies.Todetermine whichnewmarketstoenterandset
marketentrystrategies,wemeasure optionsandspecificrisksacross differentcountries.
Thisinvolvesanalyzingvariouslevels andtypesofriskwithinspecific markets,cultures,andbusinessareasto maximizethepotentialforfuture returnsoninvestment.
Forexample,newmarketentrybegins withabroadanalysisoflocal conditionsandstability,considering politicalandfinanciallandscapes, democracylevels,judicialsystems, security,anti-corruptionmeasures,and macroeconomicaspectslikecurrency stability,localinterestrates,anddebt levels.
Yourcareerhasbeenmarkedby significantachievementsinmarket entryanddevelopment.Canyou discusssomekeystrategiesyou've employedtowincontractstotaling 1.9billionEURoversevenyears?
Toachieveoursuccess,we implementedseveralkeystrategies:
• JointVentures:Wetendered widelyinjointventurestoshare financialriskwhileaccepting increasedtechnicalrisks.This approachkeptourkeystaff engagedinlocalbusiness development,prequalification,and tenderwork,regardlessofthe businessarea,market,ortypeof tenderprocedures.
• LocalPartnerships:Weinvolved localcompetitorsbyofferingsmall andmidsizecompaniesthe opportunitytoexecuteprojects underourumbrella,eitheras nominatedsubcontractorsorjoint venturepartners.Thisstrategy turnedtechnicalandfinancialrisks intoadvantages,leveraginglocal know-howinhigh-riskareasand increasingourtendersuccessrate fromapproximately10%to50%.
• BroadMarketEngagement:We engagedinvariousbusinessareas
• andtypesoftenderprocedures, ensuringourinternalteams receivedpropertraininginlocal procedures,culture,and frameworks,leadingtomore accuratecostestimatesandproject execution.
TakingItinerafromzerorevenueto becomingthelargestforeign constructioncompanyintheNordic areaisaremarkablefeat.Whatwere someofthebiggestchallengesyou facedduringthisjourney, particularlyintermsofrisk management,andhowdidyou overcomethem?
Thebiggestchallengesincluded navigatingfinancialissues,project managementdelays,contractual disputes,safetyhazards,environmental impacts,technicalerrors,andmarket fluctuations.Weovercomethese challengesthroughsystematicrisk managementprocedures:
• RiskIdentification:Assessing potentialrisksthroughstakeholder engagementandhistoricaldata reviews.
• RiskAssessment:Evaluatingrisks qualitativelyandquantitativelyto prioritizethem.
• RiskMitigationPlanning: Developingstrategiestoreduceor eliminaterisks.
• RiskMonitoringandControl: Continuouslytrackingand adjustingriskmanagementplans.
• Communicationand Documentation:Maintaining transparencyandclear communicationwithstakeholders.
Byimplementingtheseprocedures,we ensuredtimely,budget-friendly,and high-qualityoutcomes,regardlessof marketspecificsandtechnicalscopeof works.
Inyouropinion,whatarethemost criticalfactorstoconsiderwhen assessingandmanagingrisksinthe constructionanddevelopment
industry,especiallyinaforeign marketliketheNordiccountries?
Criticalfactorsincludeunderstanding localpoliticalandfinanciallandscapes, evaluatingmacroeconomicconditions, andassessingrisksrelatedto democracy,security,judicialsystems, andanti-corruptionmeasures.Itisalso essentialtorecognizetechnicalrisks associatedwithspecificprojectsand ensurecompliancewithlocal regulations.Buildingstrong relationshipswithlocalstakeholders, continuouslymonitoringandadjusting riskmanagementplans,andleveraging localexpertisearecrucialfor successfulriskmanagementinforeign markets.
Howdoyoufosteracultureofrisk awarenessandmitigationwithin yourteamandacrossthe organization,consideringthe dynamicnatureoftheconstruction business?
Wefosteracultureofriskawareness andmitigationbypromoting comprehensiveplanning,stakeholder engagement,continuoustraining,and clearcommunication.Keycomponents include:
Your success is relative to your competitors; hence you must exceed your competition at all times both in your purse of new contacrs bt also in terms of your delivery´s inside projects.
• Health,Safety,Quality,and Environment(HSQE) ManagementSystems:Integrating HSQEpracticestoaddressrisks, improveperformance,andensure compliance.
• ContinuousMonitoringand Improvement:Usingkey performanceindicators, conductingaudits,andreviewing managementpracticesfor continuousimprovement.
• EmergencyPreparednessand Response:Developingresponse plans,conductingdrills,and integratingHSQEintobusiness continuityplanning.
• EncouragingInnovationand Responsibility:Fosteringaculture ofresponsibilityandencouraging innovativesolutionstomitigate risks.
Couldyoushareanynotable experiencesorlessonslearnedfrom dealingwithunexpectedrisksor challengesinyourcareer,andhow didyouadaptyourstrategiesto addressthem?
Onenotableexperiencewasrealizing theimportanceofleveraginglocal partnershipstomitigaterisks.By involvinglocalcompaniesas subcontractorsorjointventure partners,wetransformedpotential risksintoadvantages.Thisapproach allowedustobenefitfromtheirlocal expertiseinhigh-riskareassuchas healthandsafety,timescheduling, compliancewithlocalframeworks,and technicalexpertise.Thisstrategy significantlyincreasedourtender successrateandaccuracyincost estimations,leadingtobetterproject outcomesandreducedfinancialrisks.
Asaleaderinbusinessdevelopment, whatroledoyouseeemerging technologiesanddataanalytics playinginenhancingrisk managementpracticeswithinthe constructionindustry?
Emergingtechnologiesanddata analyticsplayacrucialrolein enhancingriskmanagementpractices. BuildingInformationModeling(BIM) improvesprojectvisualization, communication,andearlyrisk detectionthrough3Dand4D modeling.Dronesandaerialimaging providesitesurveillance,progress tracking,andhazarddetection.
ArtificialIntelligence(AI)and MachineLearningdevelopadvanced riskassessmentmodelsandautomated safetyprotocols.Despite implementationchallengessuchasdata integration,trainingrequirements,and cybersecurityconcerns,these technologiesenhancesafety,efficiency, andprojectsuccessintheconstruction industry
Whatadvicewouldyouofferto aspiringbusinessdevelopment professionalslookingtonavigateand mitigateriskseffectivelywhile pursuinggrowthopportunities, especiallyincompetitivemarkets?
Iwouldadviseaspiringprofessionals to:
• ConductComprehensiveMarket Research:Understandmarket dynamics,customerneeds,and competitorstrategies.Stay informedaboutindustrytrends, regulatorychanges,and technologicaladvancements.
• BuildaStrongNetwork:Engage withindustrystakeholders,attend conferences,joinprofessional associations,andparticipatein networkingevents.Leverage connectionstogaininsights, validateideas,andidentify potentialpartners.
• DevelopaRobustRisk ManagementPlan:Identify, assess,andprioritizerisks. Developandimplementstrategies tomitigateidentifiedrisks, includingdiversifyingyour portfolioandcreatingcontingency plans.
• FosteraCultureofAgilityand Innovation:Stayflexibleandbe preparedtopivotyourstrategyin responsetomarketfeedbackor unexpectedchallenges.
• BuildaStrongTeam:Recruit individualswithdiverseskillsand perspectiveswhocancontributeto innovativethinkingandproblemsolving.
• SeekMentorshipandAdvice: Learnfromexperiencedmentors andconsiderestablishingan advisoryboardforstrategic guidance.
Byfollowingthesestrategies,aspiring professionalscaneffectivelynavigate andmitigateriskswhilepursuing growthopportunitiesincompetitive markets.
Lookingahead,whatareyourfuture goalsandaspirationsforItinerain termsofbusinessdevelopmentand riskmanagementinitiativesinthe Nordiccountries?
Ourfuturegoalsincludeadvancing existingstrategiesbycreatingaforum
forforeigncontractorsintheNordic markettoshareknowledgeand experiencesrelatedtocommon challenges.TheNordicAssociationof ForeignContractorswillbethefirst initiativeofitskind,fosteringstronger relationshipsandcollaborative solutionstomarket-relatedrisks.
Thisinitiativeaimstoenhanceindustry prosperity,reducerisklevels,and ensurecontinuedgrowthandsuccess forItineraintheNordicregion.By bringingcompaniestogether,wecan createahealthierindustrywith minimalrisks,ensuringsustainable growthandlong-termsuccess.
UnderstandingRisk A e ment:
Tools and
Techniques for Succe
Riskassessmentisacritical
componentofeffectiveproject managementandorganizationalstrategy.Itinvolvesidentifying, analyzing,andmitigatingpotential risksthatcouldhindertheachievement ofobjectives.Thisarticleexplores varioustoolsandtechniquesthat enhanceriskassessmentprocesses, ensuringthatorganizationscan navigateuncertaintieseffectively.
Understanding Risk Assessment
Risk assessment is the systematic process of evaluating potential risks that could negatively impact an organization or project. This process typically includes several key steps: identifying risks, analyzing their potential impact, and determining
appropriate responses. The ultimate goal is to minimize the likelihood of adverse events and their consequences, thereby safeguarding the organization's assets and ensuring project success.Effective risk management is essential for several reasons. It not only helps in reducing unexpected events but also minimizes costs associated with project delays and failures. By implementing robust risk management strategies, organizations can enhance decision-making, optimize resource allocation, and improve overall project outcomes.
Key Tools and Techniques for Risk Assessment
1. Risk Matrix
The risk matrix is a foundational tool used to evaluate and prioritize risks based on their likelihood of occurrence and potential impact. By categorizing risks into a grid format, project managers can visually assess which risks require immediate attention and which can be monitored over time. This tool simplifies complex risk data, making it easier for stakeholders to understand and communicate about risks effectively
2. SWOT Analysis
SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a strategic planning tool that helps organizations identify internal and external factors that could affect their objectives. By examining strengths and opportunities, organizations can uncover potential positive risks, while analyzing weaknesses and threats helps in recognizing negative risks. This comprehensive view enables proactive planning and risk mitigation strategies.
3. Probability and Impact Matrix
Similar to the risk matrix, the probability and impact matrix allows project managers to assess risks based on their likelihood and potential consequences.
This tool categorizes risks into different levels of severity, helping teams prioritize their responses effectively. It enhances decisionmaking by providing a clear visual representation of risk severity, making it easier to allocate resources accordingly.
4. Risk Register
A risk register is a critical document that identifies and describes potential risks, their impacts, and the strategies for managing them. It serves as a central repository for all identified risks, allowing project managers to track their status and prioritize actions. The risk register is vital for ensuring that all team members are aware of existing risks and their respective management plans.
5. Root Cause Analysis
Root cause analysis is a technique used to identify the underlying causes of risks or problems that have already occurred. By understanding what led to a risk, organizations can develop targeted strategies to prevent similar issues in the future. This systematic approach not only addresses immediate concerns but also contributes to longterm risk management improvements.
6. Decision Trees
Decision trees are graphical representations of decisions and their possible consequences, including risks. This tool helps project managers visualize different scenarios and their potential outcomes, facilitating informed decision-making. By mapping out various paths, teams can better understand the implications of their choices and select the most advantageous course of action.
7. Variance and Trend Analysis
Variance and trend analysis involves comparing planned project metrics (such as cost and schedule) against actual performance. This analysis helps
identify deviations that may indicate emerging risks. By recognizing trends early, project managers can implement corrective actions before issues escalate, thereby maintaining project control and success.
Conclusion
In an increasingly complex business environment, understanding and effectively managing risks is paramount. Utilizing a combination of tools and techniques such as risk matrices, SWOT analysis, and root cause analysis allows organizations to identify, assess, and mitigate risks proactively. By fostering a culture of risk awareness and employing these strategies, businesses can enhance their resilience, optimize project outcomes, and navigate uncertainties with confidence. As the landscape of risk management continues to evolve, staying informed about new tools and methodologies will be crucial for success in any project or organization.
Success consists of going from failure to failure without loss of enthusiasm.
- Winston Churchill
10 Most Inspiring Leaders in Risk Management
Leveraging Data for Effective Risk Navigation
Navigatingthroughdecadesofevolvingrisk managementpracticeshasbeenaparamount endeavorwithinadynamicindustrylandscape.As professionalsseektofortifytheirexpertiseinmitigating uncertaintiesandsafeguardingorganizationalinterests, individualslikeFernandoDyeremergeasinfluential figuresinshapingcontemporaryriskmanagement strategies.
FernandoDyer,aseasonedCorporateChiefRiskand ComplianceOfficer,bringsawealthofexperienceand insightgarneredfromhisextensivejourneyspanning variousmultinationalcorporations.Fromhisearlydaysas anexternalauditortohispivotalrolesinglobalrisk assessmentandimplementationofcomplianceframeworks, Dyer’strajectoryunderscoresarelentlesspursuitof excellenceandinnovationinriskgovernance.
UNACEMCorp.S.A.A.,aprominentplayerinthe industry,standsattheforefrontofintegratingcutting-edge technologiesintoitsriskmanagementarsenal.Through adeptutilizationofanalyticaltoolsandactiveengagement inindustryforums,thecompanynotonlynavigates emergingrisksbutalsocontributessignificantlytothe advancementofriskmanagementpracticesonabroader scale.
Let’s delve in to learn more:
NavigatingDecadesofEvolvingRiskManagement
AlthoughFernandoDyer’snamewasnotyetwidely recognizedinthefield,riskmanagementhasconsistently
beenacornerstoneofhisprofessionaljourney.Beginning asanexternalauditorinthelate1980s,hesubsequently assumedrolesincashflowmanagementandproject evaluationduringthe1990satDHLintheEuropean Region.TransitioningtoJ.T.I.in2000,Dyer’soversightof riskassessmentexpandedglobally,culminatinginhis leadershipoftheglobalimplementationofJ-SOXby2005, withafocusonfinancialreportingriskmanagement.By 2008,Dyer’spurviewextendedbeyondfinanceto encompassnon-financialriskareassuchasAnti-corruption, InternationalSanctions(OFAC,SECO),andCompliance acrossmorethan100countries.In2017,hisresponsibilities furtherevolvedtoincludeacomprehensiveriskassessment ofengineeringandconstructionprojects.
ExploringRiskManagement
Inpursuitofprofessionalgrowthandadeeper understandingofriskmanagementprinciples,Fernando DyerattendedacourseatINSEADintheearly2000s.This experiencesparkedhiscuriosityandprovidedvaluable insightsthatwouldshapehisfutureroles.Subsequently,his M.B.A.studiesinGenevain2012furtherrefinedhis approachtobothfinancialandnon-financialaspectsofrisk management.
LeadershipinComprehensiveRiskManagement
Inhisprofessionaljourney,FernandoDyerhasevaluated numerousprojectrisksduringhistenureatDHLandJ.T.I. Hestreamlinedprojectriskevaluationprocessesand developedarisk-basedapprovaldelegationmatrixwhileat J.T.I.Additionally,heplayedaco-leadershiprolein
RISK MANA ISN’ MY CAREER; IT F WHICH I’VE BUIL
implementingJSOXriskassessmentgloballyatJ.T Fernandoalsospearheadedtheimplementationof corruption,sanctions,andcomplianceriskmanagement programsinlistedcompaniesin Furthermore,hesuccessfullyimplementedtwointegralrisk managementprogramsinotherlistedcompanies.
NavigatingRiskManagementChallengesinS.M.E.s
InhisroleasCorporateChiefRiskandComplianceOfficer atUNACEMCorp.S.A.A.,FernandoDyerfacesthe significantchallengeofharmonizingariskmanagement programwiththecompany’ complicatedwhendealingwithS.M.E.s,wherethe redistributionofresponsibilitiesregardingcertainaspectsof riskmanagementbecomesnecessary
NavigatingUncertainties
Inlightofthepandemicandclimatechange,risk managementprincipleshavecomeunderscrutiny heighteneduncertaintiessurroundingkeyvariablesdemand amorerobustapproach,onethatgoesbeyondtraditional methodstodelivervaluetobothbusinessesandsociety
OptimizingRiskManagementandOversight
Fernandooverseesthedistributionofriskmanagement responsibilitiesacrosstheor defense.Hemaintainsanequilibriumbetweenriskcontrol
As Egypt embraces economic reforms and encourages investment, the landscape for business growth is becoming increasingly fertile.
Jamie Mallinder
Redening Risk Management Landscapes
Inarealmwhererisksintertwinewiththefabricof everydayoperations,thelandscapeofriskmanagement standsasacriticalpillarsupportingorganizational resilienceandsuccess.It’sadomainwhereinnovation, foresight,andadeepunderstandingofhumanbehavior convergetonavigatecomplexitiesandsafeguardwellbeing.Amidstthisdynamicbackdrop,ajourneyunfolds—a journeymarkedbypersonalgrowth,professionalevolution, andasteadfastcommitmenttoreshapingriskmanagement paradigms.
AttheheartofthisjourneyliesaseasonedleaderandChief RiskOfficer,JamieMallinder,whosetrajectoryinthe fieldofriskmanagementbegannotwithacalculatedplan butwithaserendipitoustwistoffate.Guidedbyaresolute commitmenttofosteringenvironmentsofpsychological safety,thisleader’sdedicationstemsfromadeeplypersonal experience—alossthatpromptedaprofoundshiftincareer trajectory.Spearheadingstrategiesandoverseeinglargescaleprojectsacrossdiversesectors,theirjourneyis characterizedbyarelentlesspursuitofinnovationanda visiontoredefineriskmanagementpractices.
Intherealmofriskmanagement,oneentitystandsasa beaconoftransformativesolutions—Collar®.Asaglobal providerofcommunicationandcollaborationsolutions, Collar®integratesintelligentintegrationswithsoftwareand hardwaretobringdatatolifeinthetoughestoperational environments.Withamissiontoputtherightinformationin therighthandsattherighttime,Collar®empowers organizationstonavigatethecomplexitiesofrisk managementwithagilityandforesight.
Let’s delve in to learn more:
Jamie describes his leadership style as authentic and adaptive, embodying qualities that foster an organizational culture valuing open communication, collaboration, and continuous learning.
Chief Risk Officer
Jamie Mallinder Collar®
AJourneyofPersonalGrowthandProfessional Evolution
Jamie’sjourneyinthefieldcommencedfromadeeply personalexperience,markingapivotalmomentthat redirectedthecourseoflife.Thelossofaclosefriendto suicide,atragedyleavingalastingimprint,promptedashift fromacareerinmusictotherealmofriskmanagement. Thistransitionstemmedfromaresolutecommitmentto ensuringthatnoindividualwithinaworkplacewould experiencesuchisolation,emphasizingtheinitiationofhis dedicationtofosteringenvironmentswherepsychological safetyisdeeplyembedded.
Overtheyears,Jamiehashadtheprivilegeofspearheading strategiesandoverseeinglarge-scaleconsultingprojects acrossvariouscountriesandindustrysectors.Thisdiverse exposurehasnotonlyexpandedexpertisebutalsoenriched understandingofthedistinctchallengesandopportunities inherentinriskmanagementacrossdifferentsectors.Each phaseofJamie’scareer-whetherservingasaconsultant,
in-houseriskmanager,orpresently,steeringstrategic directionatCollar®-hasbeenmarkedbyadrivetopush boundariesandinnovateriskmanagementpractices.
Jamiefirmlybelievesthatprioritizinginnovationand technologyisessentialfornavigatingtheevolvingrisk landscapeofworkandthecorrespondingglobalchallenges.
SerendipityandLeadershipEvolution
Jamie’sjourneyinthefieldofriskmanagementbegan serendipitously,drivenmorebychanceandgoodfortune thanadeliberatechoice.Reflectingonthestartofhis career,Heacknowledgestheroleoffateandexpresses gratitudetowardsRobPaleyforprovidingthepivotal opportunitythatkickstartedtheprofessionaljourney InfluencesfrommentorslikePaleyandQuentinHearn,as wellasinspirationalfigureslikeTedLasso,have profoundlyshapedJamie’sleadershipphilosophy These mentorsexemplifiedtheimportanceofbalancinganalytical rigorwithempatheticleadership,emphasizingthe
At the core of Jamie’s approach to risk management lies the pioneering use of predictive analytics and artificial intelligence (AI) to revolutionize the identification and mitigation of risks.
significanceofunderstandingthehumanelementwithin riskmanagement.
Thisblendofpersonalvaluesandprofessionaladmiration hasnotonlymotivatedJamie’sspecializationinnavigating psychosocialrisksbuthasalsofosteredasteadfast commitmenttosafeguardingworkplacehealthasa fundamentalcomponentoforganizationalsuccess.
EmbracingGrowthThroughLearningandRecognition
Reflectingonthecareertrajectory,Jamieacknowledgesthe significanceofpivotalmomentsandmilestones,manyof whichstemfromlearningexperiencesembeddedin personalandprofessionalsetbacks.Thisperspectivehas shapedJamie’sapproachtoleadership,emphasizingthe creationofa‘safe-to-fail’culture,systems,and environmentasakeyobjectiveinleadingindividualsand teams.
Inrecentyears,Jamiehasbeenprivilegedwith opportunitiestoparticipateinorleadremarkableprojects, resultinginrecognitionthroughvariousawardnominations. Notably,JamiewasshortlistedintheBusinessNews40 Under40andreceivedthe2024LiFEAwardforExcellence inSuicidePrevention,affirmingacommitmenttosuicide preventionandriskmanagementwhilereflectingabroader missiontointegratementalhealthandwell-beingintothe fabricofriskmanagementatCollar®.Theserecent accoladesbuilduponpreviousrecognition,includingbeing namedtheWHSLeaderoftheYearandwinningthe2023 LiFEAwardforExcellenceinSuicidePrevention.
TransformingOrganizationalSafetyCulture
ThroughoutJamie’sjourney,aconsistentchallengehas beenchampioningthe‘newview’theorywithin organizationshistoricallyinclinedtowardstraditional, reactivesafetyandriskmanagementmeasures.This approachperceivessafetyasadynamicandcomplex system,whereerrorsareviewedasopportunitiesfor learningratherthanassigningblame,necessitating significantculturaltransformation.
Thepathwaytoembracingthisprogressiveperspective involvedsteadfastadvocacyandstrategicimplementation ofsmall-scalepilotprograms.Theseinitialsuccessesserved astangibleevidenceofthetheory’seffectiveness,gradually dismantlingresistanceandfosteringorganizational opennesstothisnewapproach.Thisendeavorunderscored thecriticalroleofpatience,perseverance,andthe compellingforceofdata-drivenargumentsineffecting meaningfulchangeinorganizationalculture.
Thisworkhasdrivenadeepinterestinthe‘Lilypond’ theory,whichhasformedasignificantareaoffocusin Jamie’sprofessionalcareeroverthelastfewyears.
AdvancingRiskManagementThroughAIand PredictiveAnalytics
AtthecoreofJamie’sapproachtoriskmanagementliesthe pioneeringuseofpredictiveanalyticsandartificial intelligence(AI)torevolutionizetheidentificationand mitigationofrisks.Thefocusisonleveragingcutting-edge technologynotsimplyasareactivetoolbutasaproactive solutiontoanticipateandaddresspotentialchallenges.
OneofthegroundbreakingprojectsJamieisleading involvesAI-drivenmotioncapturetechnology,servingas anadvancedpredictorofsafetyrisks.Thisinnovative applicationofAIenablestheanticipationofpotential hazardsbyanalyzingmovementsandbehaviorsinreal time,significantlyenhancingpreventivemeasures.
Furthermore,Jamieandtheteamareexploringthepotential ofAIinwell-beingprograms,developingapplicationsthat customizesupportforindividualworkers.ByutilizingAI algorithms,employeescanbematchedwithsuitable providersandcoachesbasedontheirspecificneedsor receivepersonalizedself-careandsupportcontenttailored totheircurrentissues.Thisnotonlyenhancestheapproach toworkplacewell-beingbutalsoensuresthatrisk managementstrategiesareholisticandtailoredtothe uniquedynamicsoftheworkforce.
TopSegies for Identifying and Mitigating Risks in Busine
Identifyingandmitigatingrisksisa
criticalcomponentofsuccessful businessmanagement.Organizationsfacevariousinternalandexternal risksthatcansignificantlyimpacttheir operations,reputation,andfinancial stability.Thisarticleexploreseffective strategiesforidentifyingandmitigatingrisks,ensuringthatbusinessescan navigateuncertaintiesandachieve long-termsuccess.
Understanding Risk Mitigation
Risk mitigation refers to the process of reducing the impact of potential risks by implementing strategies to manage, eliminate, or limit setbacks. It is essential for maintaining a healthy business environment, as ignoring risks can lead to severe consequences, including financial losses and reputational damage. The first step in risk mitigation is identifying potential risks, which can be achieved through various methods, such as brainstorming sessions, stakeholder interviews, and reviewing historical data.
Strategies for Identifying Risks
1. Collaborative Risk Identification: Involve a diverse group of
stakeholders in the risk identification process. This approach ensures that different perspectives are considered, leading to a more comprehensive understanding of potential risks. Techniques such as SWOT analyses (Strengths, Weaknesses, Opportunities, Threats) can be particularly useful in this stage.
2. Historical Data Review: Analyzing past incidents and trends can provide valuable insights into potential risks. Organizations should maintain records of previous challenges faced and how they were addressed, which can inform future risk management strategies.
3. Regular Risk Assessments: Conducting regular assessments allows businesses to stay updated on their risk landscape. This includes evaluating both internal factors (like operational changes) and external factors (such as market conditions) that could introduce new risks.
Risk Assessment Techniques
Once risks are identified, assessing their potential impact is crucial. This involves analyzing the likelihood of occurrence and the severity of consequences. A risk rating system can be developed to prioritize risks based on these factors, allowing organizations to focus their resources on the most significant threats.
Risk Assessment Steps:
• Likelihood Analysis: Determine how likely each identified risk is to occur.
• Impact Analysis: Evaluate the potential consequences of each risk on business operations, finances, and reputation.
• Risk Prioritization: Create a risk matrix to visualize and prioritize risks based on their likelihood and impact, facilitating informed decision-making.
Mitigation Strategies
After assessing risks, organizations can develop tailored mitigation strategies. Here are some common approaches:
1. Risk Acceptance: In some cases, businesses may choose to accept certain risks if they are deemed manageable. This strategy is often applied to low-impact risks that do not threaten the organization's overall stability.
2. Risk Avoidance: When possible, organizations should avoid risks altogether. This could involve changing business processes or strategies to eliminate exposure to certain threats.
3. Risk Reduction: Implementing controls and preventive measures can significantly reduce the likelihood of risks occurring. This may include investing in technology, training employees, or establishing safety protocols.
4. Risk Transfer: Businesses can transfer risks to third parties through insurance or outsourcing certain functions. This strategy helps mitigate financial exposure while allowing companies to focus on their core operations.
5. Contingency Planning: Developing contingency plans ensures that businesses can respond effectively to risks that materialize. This includes outlining procedures for crisis management, communication strategies, and recovery plans.
Best Practices for Risk Mitigation
To enhance the effectiveness of risk mitigation efforts, organizations should follow these best practices:
• Foster a Risk-Aware Culture: Encourage open communication about risks at all levels of the organization. This helps in identifying potential threats early and promotes a proactive approach to risk management.
• Continuous Monitoring: Regularly review and update risk assess-
ments and mitigation strategies to adapt to changing circumstances. This ensures that the organization remains resilient in the face of new challenges.
• Stakeholder Involvement: Engage all relevant stakeholders in the risk management process. Their insights and expertise can lead to more effective risk identification and mitigation strategies.
By implementing these strategies, organizations can create a robust framework for identifying and mitigating risks, ultimately ensuring their long-term success and stability in an ever-evolving business landscape.
The only limit to our realization of tomorrow will be our doubts of today. , ,
- Franklin D. Roosevelt
Sophie Dupré-Echeverria
Charting the Course for Financial Resilience
Organizationsoperateinanenvironmentfilledwith uncertainties.Effectiveriskmanagementequips themwiththetoolstonavigateandthriveamid unpredictability.Organizationsneedtograpplewithboth knownandunforeseenrisksthathavethepotentialto disruptoperationsandhinderprogress.Thisgeneratesthe needforasystematicapproachtoidentify,assess,and managerisks.
Intheseuncertaintimes,theroleofriskmanagement expertsbecomescrucial.Theseexpertsprovidea frameworkfordecision-making,resourceallocation,and strategicplanningtoenhanceoverallresilienceand sustainability
SophieDupré-Echeverria,oneofthoseseasoned professionalsintherealmofriskmanagementand compliance,hasdonnedtheroleofChiefRiskand ComplianceOfficeratGIBAssetManagement, overseeingbothSMF4(Risk)andSMF16(Compliance) responsibilities.Withawealthofhands-onexperience spanningvariousfacetsofriskmanagement,Sophiebrings acomprehensiveskillsettothefinanciallandscape, particularlyinthedomainsofbankingandasset management.Wehadthepleasureofdiscussingherrisk managementapproachwithher
Below are the highlights from the interview!
Canyouprovideabriefoverviewofyourjourneyinthe fieldofriskmanagementandhowithasshapedyour professionaltrajectory?
AftergraduatinginEconomicsandfinanceinLyon,whereI grewup,Iobtainedamaster’sinOrganisationandcontrol ofFinancialMarketActivities(alsocalled‘’BackOfficeor MoM’).Itincludeda6-monthinternship,whichIspentin
thecapitalmarketsMiddleOfficeoftheCreditLyonnaisin Paris. Thatpreparedmewellformyfirstroleinthemarket riskfunctionatSocGen.InmyearlyyearsinFinance,Idid notspecializeinonespecificRiskpractice,whichhelped meavoidbeing‘pigeonholed’asanexpert.Mycareerspans thefullspectrumofGovernance,Risk,andcompliance.I haveheldrolesinfinancialandnon-financialrisk, progressivelytakingonawiderrangeofresponsibilities. Today,IamChiefRisk&ComplianceOfficeratGIBAsset Management,whereIoverseeboththebankingandthe assetmanagementbusinesswithmyteam’ssupport.
Whoorwhatinspiredyoutopursueacareerinrisk management,andhowhavethoseinfluencesimpacted yourapproachtothefield?
Igrewupsurroundedbyteachers,soIhadveryvagueideas aboutbusiness,letaloneFinanceandCapitalMarkets.I wasinitiallyattractedbytheopportunitiesofferedbythe Master’s,whereapaidinternshipwasguaranteed,and almostallstudentsfoundtheirfirstrolestraightafter obtainingtheirdiploma.
Ienjoyedthedisciplineandstructureunderpinningrisk managementandthefactthatitinvolvesinteractingwithall functionsacrossthevaluechainoftheorganization.
WhenIstartedinRiskManagement,therewasanactive, self-organizednetworkofRiskprofessionalswhoshared bestpracticesinaveryopenway,andthatinspiredmeto remainconnectedtotradeassociations.Iactedasdeputy chairoftheRiskForumoftheCharteredInstituteof Securities&Investmentfrom2008to2016andchairedthe InvestmentAssociationBusiness&EnterpriseRisk Committeefrom2016to2019.Morerecently,Ivolunteered tojoinaWorkingGroupoftheClimateFinancialRisk Forum,andIamstillanactivememberofWorkingGroups
attheAssociationofForeignBanksandUKFinance,as wellasamemberofvariousnetworksofRiskprofessionals andwomennetworks.
Reflectingonyourcareer,whataresomekeymilestones orachievementsthatyouconsiderdefiningmomentsin yourjourney?
TheturningpointinmycareerwaswhenIgotpromotedto theHeadofInvestmentRiskFrameworkatSchroders.I onlyhadateamofonetostartwith,butitwasaglobalrole withexposuretoalltheheadsofassetclassesandlocal businessheadsinEurope,theUS,andAPAC.
Itgavemetheopportunitytodevelopavisionofhowto overseeInvestmentRiskinthesecondline.
Istillrememberthewarmcongratulationsofmyfemale colleagues,whoweregladtoseeawomanbeingpromoted toahigh-profileroleatatimewhenwomeninmanagerial roleswerestillrare.
Inthedynamicfieldofriskmanagement,challengesare inevitable.Canyoushareasignificantchallengeyou facedandhowyounavigatedthroughit?
Themainchallengeinriskmanagementistocontinueto learnandadapttoarapidlychangingenvironment.Isaw whathappenedwhentheHeadofRisksorCROsaccepted themandatetheyweregivenratherthanthemandatethey shouldhavebeengiventooverseeriskmanagement effectivelyandprovidetheboardwithassuranceagainst badsurprises.
IfoundlearningaboutConduct&CultureandClimateRisk &Sustainabilityparticularlyinteresting.
Therapidadaptationrequiredbothatworkandathome duringthefirstCOVIDlockdownwasalsoachallengethat IamparticularlyproudIovercameasaCRCOandworking parent!
Whatinnovativestrategiesorapproachesdoyou employinriskmanagementtoadapttoevolvingthreats anduncertainties?
Ihavealwaystriedtolearnfromexternalevents(suchas SVBorCreditSuissefailures)andtointegratenew techniques,suchasbehaviorscience,intomypractice.
Ifacilitatebrainstormingsessionswithmyteamandthe businessonbigstrategictopicssuchasArtificial
When I started in Risk Management, there was an active selforganized network of Risk professionals who shared best practices in a very open way, and that inspired me to remain connected to trade associations. ,, ,,
IntelligenceRisk&Opportunities.Ialsousemynetworks togetideasandtips.
Howdoyoufostercollaborationwithinyourteamand acrossdepartmentstoensureacomprehensiveand effectiveriskmanagementframework?
Myapproachiscommunication,communication,andtone fromthetop.
WespendalotoftimetogetherasRisk&Compliance team.GIBUKhasadoptedahybridworkmodel,andwe setonedayintheweekasourTeam’sDaywhenweall gatherintheofficeforcollaborativeworkandin-person teammeetings.Thisallowsourteammeetingstobemore thaninformationsharing. Webrainstormontopical subjects,sharesuccesses,practicegratitudeand psychologicalsafety,orexploreculturaldifferences.
Wealsohaveateamonsiteandfunteam-buildingactivities suchascooking,escaperooms,life-sizemonopoly,etc.
Cross-departmentalcollaborationstartswhenwesetour annualobjectives.Wesitwiththebusinesstounderstand howwecanhelpsupporttheminachievingtheirstrategic objectives.Ialsoencouragemyleadershipgrouptocreate collaborativeforumswiththebusinesstodiscussRiskin theirlanguage.Thiscanberegularmeetingswiththe Investmentdeskswhentheyprovideadifferentperspective ontheirportfoliosoronewithdepartmentheadstomapout howregulatorychangesaregoingtoaffecttheirwork.
Asaparent,Ihavelearnedthehardwaythatchildrendon’t dowhattheyaretold;theydowhatyoudo.Thislessonhas servedmewellasaleader:Istrivetodevelopdeep relationshipswithmycolleaguesontheExecutive Committeeandsitdownregularlywithallandeachofthem toensurethatweleadbyexampleoncollaboration.
Howwouldyoudescribeyourleadershipstyle, especiallyinthecontextofriskmanagement,andhow hasitevolvedovertheyears?
ThankstotheexecutivecoachingthatIhavebenefited from,myleadershipstylehasevolvedtobemoreauthentic andexperimental.
Authenticityencouragespsychologicalsafety,whichis criticaltoeffectiveriskmanagement.
Theexperimentalapproachisaboutencouragingmyteam tobeinnovativeandadoptnewtechniqueseveniftheyare notfullymature.Forexample,wedevelopedsimpleclimate riskscenariosbackin2019,evenifthatmeantsimplifying assumptionsorproxiesformissingdata.Nowthatindustry practiceshaveevolved,weareenhancingourclimate scenariotestingapproachbyimplementingathird-party tool.
Whatremainsatthecoreofmyleadershipstyleis radicalorganization:Iwoulddescribemyselfasa processratherthanmarket-led,evenifsomeofthe processesthatIputinplaceareallabout monitoringthemarkets.
Whenfacedwithcriticaldecisionsrelatedtorisk,what factorsweighmostheavilyinyourdecision-making process?
Iamcarefultoweightheopportunitycostwithriskand favortransparencyabouttherisksofusingmyveto.
However,attheendoftheday,Ihavetomakethedifficult
decisionsthatwillprotectourclients,myorganization,and myownreputation.Thetestis‘Howwouldthisdecision reflectonusifitwerepublishedinthemedia?’
Howdoyouincorporateemergingtechnologiesinto yourriskmanagementstrategies,andwhatimpacthas thisintegrationhadontheefficiencyofriskmitigation?
TheuseofPythonandotheragiletechnologieshashada materialbeneficialimpactonourabilitytomeasure, analyze,andreportonInvestmentRisk.
Sofar,machinelearninghasbeenmoreusefulforreducing falsealertsintheCompliancearea.
Goingforward,Iexpectthattheadoptionofalarge languagemodelwillchangehowwepreparecreditrisk analysesandotherriskassessments.
Beyondyourorganization,howdoyoucontributetothe advancementofriskmanagementpracticeswithinthe broaderindustryorprofessionalcommunity?
BesidesmyengagementwiththeTradebodies(seequestion 2above),IamaregularspeakeratRiskconferencessuchas RiskEMEA,GRCSummit,theNewGeneration OperationalRisk,andOp.RiskEuropeandtheCredit Summit.IalsoparticipatedinBloombergpaneldiscussions onclimate&creditriskandtheMyComplianceOffice webinaronMarketAbuseRegulation.In2024,Iwillhosta SeniorFemaleLeadersinRisknetworksessionatGIB’s offices.
Riskisnotjustaboutthreats;it'saboutopportunities too."-SharmynPowell.Inthehigh-stakesworld ofcentralbanking,whereeverydecisioncanhave far-reachingconsequences,SharmynPowellstandsasan alarmofcalmandstrategicbrilliance.AstheChiefRisk OfficeroftheEasternCaribbeanCentralBank(ECCB), shehascarvedapathofexcellence,directingthecomplex sectorofriskmanagementwithprecision.
Herjourneytothepinnacleofherprofessionbeganwitha solidfoundationincharteredaccounting.Heranalytical skillsandmeticulousattentiontodetailsoonpropelledher intotherealmofriskmanagement,whereshefoundher truecalling.ItwasnosurprisewhentheECCBrecognized herexceptionaltalents,promotinghertothecovetedroleof ChiefRiskOfficerin2016.
UnderSharmyn'sleadership,theECCBhasundergonea transformativeshift,adoptinganenterpriseriskmanagement(ERM)frameworkthathasbecomethecornerstoneof itsoperations.Herinfluenceextendswidelyacrossthebank asshespearheadedthecreationof“TalkingRisk,”a publicationthatsimplifiestheconceptofriskmanagement andfostersacultureofriskawarenessthroughoutthe organization.
Butherimpactdoesn'tstopthere.AstheChairpersonofthe Bank'sFintechWorkingGroup,shehasplayedapivotal roleinnavigatingthecomplexworldoffinancialtechnology,ensuringthattheECCBremainsattheforefrontof innovationwhilemitigatingpotentialrisks.Herstrategic visionandcollaborativeapproachwereinstrumentalinthe successfullaunchoftheDCashPilot,aninnovative initiativethatpositionstheECCBasatrailblazerindigital currency.
Withherextensiveexpertiseandenthusiasm,Sharmynhas transcendedtheboundariesofherrole,contributingher invaluableinsightstovariouscommitteesandinitiatives withintheECCB.Herachievementshavesolidifiedher reputationasatruetitaninthefieldofriskmanagement,a leaderwhoseinfluenceextendsfarbeyondtheCaribbean region.
Below are the interview highlights:
Canyouprovideabriefoverviewofyourjourneyinthe fieldofriskmanagementandhowithasshapedyour professionaltrajectory?
HavingservedinvariouscapacitiesacrosstheEastern CaribbeanCentralBank(ECCB)over20years,Iwas appointedastheChiefRiskOfficerattheECCBin
September2016.Inassumingthisrole,Ihadresponsibility forthedevelopmentandimplementationoftheBank’s EnterpriseRiskManagement(ERM)function.
Althoughtherewereexistingriskmanagementpractices acrossthebank,theyfollowedamoresiloedapproach, whichwasnotfullyeffective.Inthisnewrole,Ihadthe opportunitytodeveloptheBank’sERMPolicyand FrameworkincludingtheBank’sRiskAppetiteStatement (followingconsultationwiththeBoardofDirectors),the riskmanagementprocess,andriskreportingtools,aswell asestablishtheriskreportingstructure.Havingdeveloped thefunction,Ithenhadtheresponsibilityofimplementing itacrossthebank.
MyappointmenttotheroleofChiefRiskOfficerwasthe beginningofaveryinsightfuljourneyinriskmanagement. Itallowedmetogainsignificantexposuretoawiderange ofbusinessareasasIengagedinextensiveresearchand interactionstoinformthedevelopmentoftheframework.I alsogainedadeeperunderstandingofthevariousdepartments’operationsacrossthebankaspartoftheERM implementation.
Astheprocessevolved,thisnewassignmentcatalyzedthe advancementofmycareerthroughanexpandedprofessionalnetworkandpresentedopportunitiestoenhanceand sharemyknowledgethroughvariousforumsandassignmentsbothwithinthebankandexternally.Italsohelped tremendouslyinimprovingmyprofessionalmaturity.
Whoorwhatinspiredyoutopursueacareerinrisk management,andhowhavethoseinfluencesimpacted yourapproachtothefield?
Asacertifiedaccountant,theconceptofriskmanagement waspartofmyDNA,asIalreadyhadananalyticalmindset andafocusondetails.However,theactualshiftawayfrom accountingtofull-timeriskmanagementwasprecipitated bythebank’sdecisiontoestablishanERMfunction.
GovernorAntoineexpressedhisconfidenceinmy suitabilityfortheassignmentbasedontherecommendationsreceivedaswellasourinteractionssincehisassumptionofofficeearlyin2016.Iwasalsoencouragedto‘take onthechallenge’bythethen-ManagingDirector,Mrs. JenniferNero,whowasconfidentthatmyformaltrainingin accountingaswellasmyyearsofexperienceatthebank hadadequatelypreparedmefortherole.
IrecalltheresponsefromtheformerGovernor,thelateSir K.DwightVenner,whenIinformedhimthatIhadbeen appointedasCRO;hecommented,“Thatisnosurprise;you
aremorethanpreparedforthatrole.”Hethensaid,“You arenowintheboys’club,”referringtothebookthathehad giftedmeonhisdeparturefromthebank,‘Breakinginto theBoys’Club:8WaysforWomentoGetAheadin Business.”
Inconsideringthisnewopportunity,Iwasalsoinfluenced bymypassionforinterrogation,gettingthingsright,and ‘thinkingoutsidethebox’whenexecutingtasks.Admittedly,theinherentdownsideofbeing‘unpopular’inlightof thenaturalintrusivenatureofriskmanagementwasnot overlooked,butgivenmyyearsofexperience,particularly atthemanagementlevelofthebank,Ifeltpreparedforthe challenge.ThesupportIreceivedfromthebank’sexecutive throughoutthejourney,particularlyintheearlieryears,as wellasvariouscolleaguesacrossthebank,togetherwith exposuretoformalriskmanagementtrainingandopportunitiesforinteractionwithotherriskprofessionalsworldwidetogainnewperspectivesandmatureasaprofessional, havealsobeenmajorcontributorstomysuccess.
Reflectingonyourcareer,whataresomekeymilestones orachievementsthatyouconsiderdefiningmomentsin yourjourney?
MyfirstmajorachievementasCROwasthedraftingofthe bank’sriskappetitestatementandERMpolicyand framework,whichwerereviewedandendorsedbyan externalconsultingfirmthathadawell-establishedrisk managementprogram.
Giventheintricaciesofthebank’soperationsandthe importanceofthesedocumentsindefiningthesuccessof theERMfunction,thiswasverychallenging.Having implementedtheframework,theexpressionsfromthe ExecutiveCommitteeandBoardAuditandRiskCommittee ontheutilityofthisnewfunctionalsounderscoredits positiveimpact.
Thecreationoftheanimatedseries“TalkingRisk”isalso oneofmytreasuredachievements.Thiswasa12-week printseriesthatIauthoredtohelpstaffbetterunderstandthe riskmanagementprocessusingeverydayexamplesthat peoplecouldidentifywith.Theinitiativewasapplaudedat alllevelsacrossthebankandisstillregardedasakeytool forpeopletogainabetterunderstandingofriskmanagement.
MyappointmentastheChairpersonoftheBank’sFintech WorkingGroup,whichwaschargedwiththedevelopment ofadigitalversionoftheECcurrency,isoneofmymost notableachievementstodateandhasbeenagamechanger inmyjourneyasariskprofessional.Althoughtherolewas
notonethatsolelyinvolvedriskmanagement,myexperienceasChiefRiskOfficerwasakeydeterminantinthe selection.
Inthisrole,Iwasrequiredtoapplymyknowledgeand skillstothemanagementofallkeyriskareastoensurethe properexecutionoftheproject.Mostimportantly,the bank’sreputationhadtobecloselyguardedthroughoutthe process,andthemanagementofthiskeyriskarearemained attheforefront.ThehistoriclaunchoftheDCashPilotin March2021wasamajorachievementandasignificant milestoneinmyjourney Thisparticularassignmentnot onlydeepenedmyexperienceinriskmanagementbutalso createdawiderangeofnewopportunities,including speakingengagements,appointmentstocommitteeswith internationalparticipation,andrecognitioninvarious media,whichhavesignificantlyexpandedmyreachasa professional.
Inthedynamicfieldofriskmanagement,challengesare inevitable.Canyoushareasignificantchallengeyou facedandhowyounavigatedthroughit?
Themostsignificantchallengeformeasariskmanagerhas beenchangingtheriskcultureattheorganization.The proverbial‘resistancetochange’necessitatedtheimplementationofvariousmeasurestoadvancetheprocess.One suchinterventionwastheutilizationofanexternalconsultanttoassistwiththeimplementationprocessaspersons tendtobe‘morereceptive’tosuchstrategies.
Inaddition,one-on-onesessionswereheldwitheach departmentacrossthebanktoprovideadeepdiveintothe riskmanagementfunction,highlightingindividualand collectiverolesand,mostimportantly,reinforcingthe benefitsofriskmanagementinimprovingoverall productivity TherelianceontheExecutiveCommitteeto setthe‘tonefromthetop,’requiringmanagerstoembed riskmanagementintheirdepartments’workprograms,was alsoameasureusedtoovercomethechallenge.Itremainsa workinprogressaswenavigatethecontinuouschangesin therisklandscape.
Whatinnovativestrategiesorapproachesdoyou employinriskmanagementtoadapttoevolvingthreats anduncertainties?
WehaveassignedRiskLiaisonsineachdepartmentwith responsibilityforthecoordinationoftheirdepartments’risk functionsincollaborationwiththemanagementteam.This improvesaccountabilityandprovidesasinglepointof contactineachdepartmenttoadvanceriskmatters.
My leadership style is generally one that is inclusive, taking into consideration all perspectives and allowing different ideas to contend and augured well in advancing the risk management function and garnering the necessary support and cooperation.
Thereisalsoarobustprocessthatrequiresdepartmentsto conductongoingsurveillanceoftheoperatingenvironment andrisklandscaperelativetotheirrespectivework programsandidentifyanyemergingrisksthatrequire attention.TheestablishmentofaRiskManagement Committeewithmanagementrepresentationfromall departmentshasalsoprovenbeneficialinensuring consistencyintheprocessandacomprehensivereviewof allexistingandpotentialriskareas.
Howdoyoufostercollaborationwithinyourteamand acrossdepartmentstoensureacomprehensiveand effectiveriskmanagementframework?
Regularteammeetingsandcapacity-buildingsessionsare themaintoolsusedtobuildcohesionwithintherisk department.Thisalsoallowsforknowledgesharingand continuityintheeventofabsences.Acrossthebank,the riskmanagementdepartmentarrangesannualone-on-one sessionswithdepartmentstodiscussthebank-widerisk managementfunctionaswellasmattersspecifictotheir department.
However,additionalsessionsmaybeconvenedatthe requestoftheriskmanagementdepartmentoranindividual department.RiskLiaisonsarealsoexposedtocapacitybuildingsessionsasdeemednecessary,inadditionto ongoingcross-collaboration.
Howwouldyoudescribeyourleadershipstyle,especiallyinthecontextofriskmanagement,andhowhasit evolvedovertheyears?
Myleadershipstyleisgenerallyonethatisinclusive,taking intoconsiderationallperspectives,allowingdifferentideas tocontendandauguredwellinadvancingtheriskmanagementfunction,andgarneringthenecessarysupportand cooperation.
However,asIbecamemoreentrenchedintheroleofChief RiskOfficerandtheriskmanagementfunctionexpanded,it wasnecessary,insomeinstances,toadoptamore‘focussed’approachtoadvancecriticaltasksandensurekey riskswereeffectivelymitigatedandlosstothebankwas minimized.Thekeyhasbeenfindingtherightbalanceand havingtheprofessionalmaturitytoknowwhentoadjust.
Whenfacedwithcriticaldecisionsrelatedtorisk,what factorsweighmostheavilyinyourdecision-making process?
Giventhenatureofthebank’soperations,itsrolesand functions,anditsheavyrelianceonmoralsuasioninits interactionswithvariouskeystakeholders,anymajor negativeimpactonthebank’sreputationcanhavesignificantdownstreameffects.Consequently,theeffective managementofreputationalrisksisalwaysatthecenterof allcriticalriskdecisions.
Howdoyouincorporateemergingtechnologiesinto yourriskmanagementstrategies,andwhatimpacthas thisintegrationhadontheefficiencyofriskmitigation?
Weareconstantlyseekinginnovativewaystoimprovethe riskmanagementprocess.HavingstartedwithExcel templatesasthetoolforriskreporting,wewereableto makemodificationsandadjustmentstoensuretherelevant datawasbeingcollected.
However,thecollationofthesereportsisanarduoustask andintroducesinefficiencyintheprocess.Wetherefore continuallyexplorenewtechnologiesthatcanautomatethe process,allowformoreproactiveresponsestoriskissues, andbringusclosertothevisionofhavingareal-time enterpriseviewofthebank’srisklandscape.Wearehoping toimplementanewGovernanceRiskandCompliance (GRC)solutioninshortordertoachievethisvision.
Beyondyourorganization,howdoyoucontributetothe advancementofriskmanagementpracticeswithinthe broaderindustryorprofessionalcommunity?
HavingsuccessfullyimplementedtheERMfunctionatthe bank,Ihavebeeninvitedtosharemyexpertisewithother centralbanksandprivatesectorinstitutionsthatareseeking toimplementand/orenhancetheirriskmanagement functions.IalsoserveontheAuditandRiskCommitteeof theSt.KittsandNevisOlympicCommittee.
Morerecently,Ihavealsobeenabletoapplymyknowledgeofriskmanagementintheexecutionofmydutiesasa secondeeattheBankofInternationalSettlementsInnovationHub(BISIH).Theseopportunitieshavepropelledmeto anewlevelofbeingregardedasaleadingriskprofessional whocouldassistinadvancingotherorganizations.
- Simon Sinek
ChaengesofThird-PartyRisk Management and How to Overcome Them
Third-partyriskmanagement
hasbecomeincreasingly importantforbusinessestoday
Withcompaniesrelyingmoreonthird partieslikevendors,suppliers,and partners,theyareexposedto significantrisksiftheserelationships arenotproperlymanaged.percentof businessesbelievethatthird-party missesactuallyresultedinoperational disruptions.
Whilethird-partyrelationshipscan providetremendousvalue,theycan alsoexposebusinessesto cybersecurity,financial,regulatory,and reputationalrisksifnothandled carefully Thestakesaresohighthat moreandmorebusinessesare embracingrobustthird-partyrisk managementframeworksfortheir business.
Nowadays,therehasbecomeawebof interconnectednessthatlarge businessesrelyonthirdpartiesfor somefunctionswhilethirdpartiesrely onfourthpartiesforsomeoftheir functions.
TPRMChallengesandOvercoming Them
Thereisacomprehensiveand significantlistofchallengesposedin frontofeffectivethird-partyrisk management.Inthisblog,wewill discusssomeofthekeychallengesin managingthirdpartyrisksand strategiestoovercomethem.
LackofVisibilityintoThird-Party Practices
Oneofthebiggestchallengesfor businessesisthelackofvisibilityinto athirdparty'spolicies,procedures,and controls.Withoutanunderstandingof howthirdpartiesoperate,manage internalrisks,andhandlesensitive data,itisdifficulttogaugethelevelof riskexposure.Manythirdpartiesmay notbetransparentabouttheirpractices ormayhaveimmaturerisk managementprograms.Building visibilityintotheiroperations,cyber maturitylevels,andriskcultureis crucialbutdifficultwithouttheir cooperation.
Lackofvisibilityisoftenthefirst challengeofthird-partyrisk management Theunclearandshoddy pictureofthird-partyethicsand practicesmakeitdifficulttoframeand scalethethirdpartiesaccordingto thirdpartyriskmanagement framework.
Businessescanovercomethisby conductingcomprehensivedue diligenceonthirdpartiesbefore partneringwiththem.Detailedrisk assessmentsandquestionnaireshelp betterunderstandtheircontrols. Regularsitevisits,audits,andtesting proceduresalsoprovidevisibility Beingproactiveandaskingthird partiestogetindependentvalidations likeSOC2reportscanalsohelpgain assurance.Oncetheveilistakenoff fromthethirdpartiesandeverything becomescrystalclearthenitbecomes easierforbusinessestogradethird partiesintoriskcategories.
ResourceIntensiveRiskAssessments
Whileassessingthirdpartyrisksis critical,theprocesscanbequite
intensiveintermsoftime,effort,and resources.Largeorganizationsmay havethousandsofvendorsand conductingin-depthriskassessments oneachcanbeextremelychallenging. Thedynamicnatureofthird-party relationshipsalsomeansthat assessmentshavetobeupdated regularly
Businessescandealwiththisby adoptingrisk-basedapproaches,where thirdpartiesarecategorizedbasedon criticalityandprioritizedfor assessmentsaccordingly.Automation toolscanalsohelpstreamlineand speedupriskassessmentsbyproviding questionnaires,documentcollection, andstandardtemplates.Focusing assessmentsonvendorshandling sensitivedataorcriticalserviceshelps optimizeresources.
ComplexRegulatoryRequirements
Navigatingdifferentregulatory compliancerequirementsaroundthird partiesalsoposeschallenges. RegulationslikeGDPRintheEU, CCPAinCalifornia,andothershave specificobligationsaroundvendorrisk managementanddataprotection. Understandingregulatoryexpectations andtranslatingthosetoworkflow processesandcontractualtermswith globalthirdpartiesmakescompliance difficult.
Partneringwithlegalcounseland complianceexpertsisimportantto interpretregulatoryguidelinesrelated tothirdparties.Monitoringregulatory changesandadaptingpoliciesand proceduresisalsokey.Implementing robustdataprotectionmeasures,audits, andduediligencealignedtoleading regulationscanhelpmeetglobal compliancestandards.
LackofStandardizationinRisk ManagementPractices
Whileregulatorystandardshelp provideguidelines,manybusinesses stillstrugglewiththelackof standardizationinthirdpartyrisk
managementpracticesacrossthe industry.Riskassessment questionnaires,KRIs,audits,and contractsvarysignificantly Thismakes benchmarkingdifficultandalsocreates additionalburdensforthirdparties workingwithmultipleclients.
Aligningwithindustryframeworksand standardsliketheISO27001orNIST cybersecurityframeworkcanhelp organizationsbenchmarkagainstpeers. Joiningindustrygroupstocollaborate onriskmanagementpracticesisalso beneficial.Partneringwiththirdparties tocreatestandardizedself-assessment questionnaireshelpsreducetheir burdentoo.Atest-oncephilosophyand mutualacceptanceofstandard certificationsandreportsenable efficiencies.
OversightofSubcontractors
Withlongandcomplexsupplychains, businesseshavetocontendwith'fourth partyrisk'createdbythirdparty subcontractors.However,companies oftenhavelittlevisibilityorcontrol oversubcontractors,makingrisk oversightverytricky.Fourthpartyrisk managementisalsoaneffective componentofarobustTPRM framework.Infactasenseofsafety andsecuritymustprevailthroughout thewholesupplychainecosystem.
Requiringthirdpartiestodisclosetheir useofsubcontractorsandincludeflows downofcontractualtermsisimportant. Conductingspotchecksorauditsof criticalsubcontractorsprovidessome visibilityeveniflimited.Exploring emergingtechnologieslikeblockchain toenhancesupplychaintransparency canalsohelpwiththeoversightof subcontractors.
IneffectiveatScalingAcrossLarge Network
Finally,addressingthirdpartyrisks oftenremainsafragmented,manual process.Thismakesscalingrisk managementacrossalarge,global
networkofthirdpartiesnearly impossible.Lackofautomationand dataintegrationposeschallenges.
Movingtoplatform-basedsolutionsfor vendorriskmanagementintroduces automationinriskassessments, documentation,andanalytics.This approachscalesseamlesslyacrossthe networkandprovidescomprehensive visibilitythroughintegrateddata. Machinelearningalsoallows benchmarkingrisksandpredicting non-compliance.IntegratingGRCtools withprocurementandP2Psystems alsohelpsembedriskearlyduringthe sourcingstages.
Conclusion
Managingthirdpartyriskiscomplex butcriticalforbusinessresilience. Whiletherearemanychallenges, takingaproactive,pragmaticapproach focusedontransparency,automation, standardization,andsmartresource allocationcanhelpcompanies overcomeroadblocks.Thesolutionslie inassessingriskcontinuously collaboratingacrosstheecosystem, utilizingenablingtechnology maintainingrigorousoversight.By makingthirdpartyriskmanagementa strategicimperativebackedbysenior leadershipsupport,companiescan effectivelyscaletheirvendorassurance programs.
Author Bio:
NagarajKuppuswamyistheCofounderandCEOof Beaconer esteemedenterprisespecializingin managedthird-partyriskusingthe cloud-nativeAI-basedsolution.With anextensiveportfolioofaccoladesand industrycertifications,Nagarajstands outasaseasonedexpert,boastingover 16yearsofdedicatedinvolvementin thefieldofCybersecurity Throughout theircareer,hehaspredominantly focusedonelevatingtherealmofthirdpartyriskassessment.Youcanconnect withhimthroughLinkedin.
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