Page 20 - IRMSA Risk Report 2021

“The only thing necessary for the triumph of evil is for good men to do
nothing.”

Edmund Burke

The Chief Risk Officer of First National Bank, Lytania Johnson reflects
that, “it’s been an interesting time for the risk community. We’ve
been training to respond to a pandemic event for some time, but
we didn’t anticipate that it would happen at this magnitude”. What
has been interesting about this pandemic is that it was not just an
operational resilience event, but also had a huge impact on the
financial risks of the organisation. What we had to consider as a risk
function is how to respond to managing operations, at the same time
considering the impact on the credit portfolio, and broader liquidity
risk management. What has been great is that although we have
always been at the centre stage of the strategic conversations, we’ve
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really been partnering with business during the crisis.”

The crisis has also challenged the extent of planning required,
considering risk-adjusted strategies based on the various scenarios,
LYTANIA JOHNSON
CHIEF RISK OFFICER - FIRST with the operational risk experts taking centre stage. We also had to
NATIONAL BANK assess the impact on credit risk and consider risk sensitivities. It was
important for the organisation to understand that there is a new way
of working.

The organisation had to consider the impact on operational processes and client-centric solutions to ensure that customers
still felt that they could interact meaningfully with the organisation. The increasing uncertainty and complexity in the global risk
landscape presents both threats and opportunities that will likely distinguish between the potential winners and losers amongst
global corporates and society at large. The one thing that the pandemic has reinforced is the interconnected nature of risk and the
need to collectively manage current and emerging risks as corporates, governments, and communities as part of the global village,
to achieve a better overall outcome against a common risk or threat.

In conclusion, leaders in our country are of one opinion – that we cannot waste this crisis. South Africa is compelled to take
advantage of the lessons learned from Covid-19 and the impact it has had on the world. However, we will need to take a hard look
in the mirror and decide what we are about: to what extent do we need to take a stand and how much can we leave to “providence”?
There is an eerie echo from an analysis of why the world of the late Bronze Age collapsed in the following quotation from Eric H.
Cline’s book 1177 B.C. The Year Civilization Collapsed:

“When the end came, it did after centuries of cultural and technological
evolution, most of the civilized and international world…came to a dramatic
halt…The end of the massive palatial states…opened the door for the
growth of a new world on a more human scale…”

We are living in a time of history in the making.

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