Risk STILL isn’t optional: nor is the truth!


Where are the “risk leaders”?

Instead of FS compounding the problems we should be utilising our expertise and resources to establish a means of “repaying” society, by promoting, supporting and investing in building community resilience.

EVERY project, process, task, operation being undertaken by an organisation is reliant upon varying degrees of INTER-CONNECTED process that (often unseen) underpins function. Each contains some degree of risk.

The more complex the process or product the greater the exposure. Risk does not ‘run parallel’ to function, it is inherent to it and, as such, RM cannot be viewed as an option or add-on! To me this, scarily common and naive perspective serves to reinforce the need for a paradigm shift in Corporate culture.

I have revisited this old article for a couple of reasons. Firstly, (even though I say so myself) I thought it rather good! Secondly, I am seriously concerned that, where there should be “thought leadership”, there are, instead, clear signs that in some quarters a, subjective, consultancy-led approach is preferred to a rigorous, quantitative, analysis of business exposures!

This despite IRM, in a paper issued last year [Risk Appetite & Tolerance], advocating a more quantitative approach. In their accompanying webinar they offered a timeous reminder of Board level responsibilities:

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Still subjective, still correlation but getting closer… :: Accenture identify characteristics of "The Risk Masters"


So, if reports from, the likes of AIRMIC “Roads to Ruin”, World Economic Forum/Zurich, FSA (on RBS), PwC, IBM, UK Government, Zurich and Towers Watson (to name a few recent contributors) have failed to penetrate engrained – but flawed – belief systems, it may be a forlorn hope that Accenture can succeed with this report…but, we live in hope! Hence my resolve to share this kind of useful information as widely as possible.

WEALTH WARNING: all risk management is not made equal and it should not be solely about risk…but reward!

Click to EnlargeBlack Swan resilience

More reports into the subjects of risk management, complexity and compliance can also be found here. Of the recognised Consultancy firms it certainly appears that AT Kearney have the best understanding of the subject of complexity but, unlike Ontonix, NONE, to date, have presented a, measurable, definition or means by which an organisation can begin to explore the issue themselves.

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Survey: Business Leaders Are Surprised That Sustainability Actually Pays Off


There is little I can or need to add to this…other than please don’t let a flawed belief system damage your health and wealth or that of the rest of us!

…this sampling of average businesses is instructive on the thinking taking place in C-suites. “It’s clear that sustainability is no longer merely a matter of compliance,” said Bruno Berthon, managing director of Accenture Sustainability Services. Most corporate leaders know sustainability can pay off, but about a third still think it’s not important according to the survey.

via Survey: Business Leaders Are Surprised That Sustainability Actually Pays Off – Business – GOOD.

Business Models: High Performance in Insurance (Accenture)


BusinessModel

Image via Wikipedia

I care about the insurance industry…sad but true!

Banks need to waken up to the potential of social media

But, as an industry, it is its own worst enemy. Simultaneously too stupid and too smart for its own good; great at dishing-out advice but not at taking it; far better at talking than at listening. Problem is that the time to listen to customers, commentators and consultants is passing much more quickly than any elements of their “demands” are being applied and meaningful change initiated. So what’s the problem?

It isn’t a lack of financial or human resources and, let’s face it, creating and deploying a credible strategy to rebuild trust has got W-I-N-N-E-R written all over it. Trouble is that, despite the potential rewards, CULTURE REMAINS A MAJOR OBSTACLE TO INNOVATION & MAXIMISING “SOCIAL BUSINESS” OPPORTUNITIES.

...insurers now must blend mature and emerging markets in ways that can optimize their growth and overall performance, and they must incorporate mobile communications and social media into their operations to stay close to customers and protect their brands. Social media, in particular, poses risks, as does entry into emerging markets, aging workforces and increasing volumes of business conducted online. Yet consumers increasingly are demanding online services, as they become more complex and diverse, forcing insurers to develop more actionable segmentation strategies. Intensifying all of this is a competitive landscape in flux, from the return of brokers to the rise of aggregators to more joint ventures and service-based differentiation.

via Business Models – High Performance in Insurance – Accenture.

CEO’s recognising BENEFITS of sustainability


CEOs See Sustainability Issues as Critical for Future Business Successrecycle istock_000008722438xsmall

CEO’s seem to spend a lot of time participating in surveys. This may not come as a surprise to some!

Perhaps, talking about sustainability is part of their therapy to help deal with the “trauma” associated with contemplating consultancy-sponsored questions relating to the, apparently, numerous strains of a growing complexity pandemic!? I DO wonder how many [CEO’s or consultants] have recognised the relationship between the two? Irrespective we should ALL be grateful that both are now on the agenda.

The vast majority of CEOs believe that sustainability issues will be critical to the future success of their business, and they want investors to more accurately value sustainability in their long-term investments, according to a new survey by Accenture and the UN Global Compact.

The survey involved 766 CEOs and top executives, including face-to-face interviews with over 50 of the world’s foremost business executives.

This new research found that:

  • 93 percent of the CEOs polled believe that sustainability issues will be critical to the future success of their business.
  • 86 percent want investors to better price sustainability issues into valuations.
  • CEOs are addressing sustainability issues in new ways.  For instance, 58 percent of survey respondents cited the consumer among their most important stakeholders, even above employees (45 percent) and governments (39 percent).
  • 91 percent of those polled said that their company would be employing new technologies and innovation to help meet sustainability goals over the next five years.
  • Partnerships and collaboration are increasingly important. 78 percent of survey respondents feel that companies should engage in industry collaborations and multi-stakeholder partnerships to address sustainability goals.

In 2006, the UN launched the Principles for Responsible Investment Initiative (PRI), a $20 trillion effort developed to persuade mainstream investors to better integrate environmental, social and governance (ESG) issues into valuations and investment processes. At a major UN Summit in New York City last week, Donald MacDonald, PRI Chairman urged investors to ‘push further’ despite recent progress.

“Time and again investors have seen how ESG issues can affect investment performance and there is now a critical mass of institutional investors who know that good management of these issues is an  important factor in for the  long-term financial success of their investments.  I expect the next decade to be an age of responsibility for capital markets,” he said. “If a company has poor corporate governance or persists with bad environmental management then it can, and should, affect the long-term valuation of the company. The truth is that’s still a relatively new concept for many investors, but there are now leaders in mainstream markets that have developed the tools and models to integrate sustainability and who can push the global capital markets beyond the tipping point on sustainability.”

The 60-page report, titled A New Era of Sustainability, is available here.

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