Page 13 - IRMSA Risk Report 2021

“There is common acceptance that the world has had a very
traumatic year, with very real financial and health challenges
to deal with”.

1.1 INTRODUCTION

Last year we introduced the IRMSA South Africa Risk Report 2020, by quoting Charles Dickens’ A Tale of Two Cities (1859):
“It was the best of times, it was the worst of times,
It was the age of wisdom, it was the age of foolishness,
It was the epoch of belief, it was the epoch of incredulity,
It was the season of light, it was the season of darkness,
It was the spring of hope, it was the winter of despair,
We had everything before us, we had nothing before us,
We were all going direct to heaven, we were all going direct the other way...”

And then came the year 2020…

The global pandemic has once again reminded us of the uncertainties of the future. These uncertainties materialise in both
unrewarded risks that require managing on a continuous basis, as well as opportunities that need to be leveraged to enhance
returns and stakeholder value. This serves to reinforce the importance of effective risk management practices in organisations,
governments and within society at large, focussed on the “known knowns”, the “known unknowns” and the “unknown unknowns”, all
of which require very different responses across varying time horizons.

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there
are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know.
But there are also unknown unknowns – the ones we don’t know we don’t know.” ― Donald Rumsfeld

This year’s IRMSA Risk Report is once again a tale of two cities, and perhaps even more so, reflecting the changing universe of
risk and increased risk exposures as a result of the global Covid-19 pandemic, together with the continuing socio-economic and
geopolitical realities we face as a country. To provide deep insights on South Africa’s risk profile, we engaged with key South African
leaders.

According to Jacques Celliers, the CEO of First National Bank, there is
common acceptance that the world has had a very traumatic year, with
very real financial and health challenges to deal with. We’re all placing our
hopes on an effective vaccine to help restore momentum and the level
of positive market sentiment, but it’s clear that risk strategies did not
comprehensively recognise the near-term potential of a global pandemic
and required adjustments to be made. Short term risks are easier to
predict, than medium- or longer-term risks. This year, risk and risk culture
have had to take centre stage on the executive agenda, with risk thinking
requiring further integration with business strategy. To this, we can
add that 2020 proved, beyond a shadow of a doubt, that South Africa’s
vulnerability to external influences leaves us little room to manoeuvre: For
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South Africa to be resilient and to prosper, leaders must clearly prioritise
critical national policy drivers and implement them tenaciously. Once our
existential vulnerabilities are taken care of, we can debate the “nice to
haves” in our society.
JACQUES CELLIERS
CEO - FIRST NATIONAL BANK

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