Page 71 - IRMSA Risk Report 2021

4.7 RISK PROFESSIONAL COMPETENCIES
A PIVOTAL ROLE

Executive and non-executive directors consistently complain that risk management does not provide strategic advantage or
valuable insights to decision-making. They say that no real insight is given, and risk reports are typically a list of known risks that are
a rehashed or updated version of what business leaders already know.

Concerning risk management not providing strategic value, the likely culprit is that risk management is set up and viewed as a
separate process instead of an integral part of managing an organisation for success. However, there is a bigger underlying cause:
the risk management team works with business units to understand risks and generate reports, but they are not invited to the
strategy development session, where the real value of risk management could come to the fore.

A CHANGED MINDSET
Risk professionals must change their mindset and improve their competencies if they are to overcome this problem. They must
understand that risk management is not about their standard, framework, knowledge, interests, skills, or background. It is not even
about managing the threats to the organisation. It is about ensuring that organisational objectives are met and that the company
is successful and sustainable. Norman Marks clarifies that: “the effective management of risk enables more informed decision-
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making, from the setting or modification of strategy to the decisions made every day across the extended enterprise.”

Carol Williams explains that for there to be a shift in how executives react to risk management, risk professionals must transform
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themselves and their mindset. A changed mindset does not come naturally and requires focused effort on the part of the risk
professional.

A few other pointers for shifting your mindset include:

FOCUS ON DECISION-
KEEP YOUR EGO IN MAKING
MAINTAIN CHECK Remember, it is not about
NEUTRALITY Strategic planning is not COMMUNICATE the risk register. Although it
The risk professional’s a “risk management” or a Constantly communicate can be disheartening to see
role in strategic risk discussion. The risk and engage business business file your reports
planning is to provide a professional is merely to explain your role, away never to be read again,
unique perspective, ask part of something bigger. your neutrality, and the risk professionals must
the right questions, and Offer and ask what you can perspective you can bring remember that their role is
ensure the right people contribute to ensure the to the conversation. to help the organisation’s
are in the meeting. right discussions take place leaders make risk-informed
decisions, which include
in the most beneficial way. . deliberate risk taking and not
just risk avoidance.

4 Marks, N, World Class Risk Management, 2015
5 Blog: www.erminsightsbycarol.com

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