Airmic is a members’ association supporting those responsible for risk management and insurance within their own companies. We have nearly 1200 individual members who represent over 450 companies.
Could a new role be created to give risk managers a voice at board level?
Manvir Basi of the Russell group makes the case for the Corporate Orchestrator and Innovator.
We believe there could be a role focussed on risk and opportunity that sits between the c-suite and the rest of business. We have termed it the Corporate Orchestrator and Innovator (COI).
In small well-run enterprises, the management team will own all aspects including the vision and the business model that supports it; they understand how their business works, and management of both risks and opportunities, albeit often in an unstructured way, is inherent in how they drive the business forward.
Entrepreneurial flair is endemic within the decisions that are taken to move the business forward. The management understand their customers, their suppliers and their competition, they have a good perspective of their chosen market and they listen to the people who work for them.
In larger organisations that connection with the intricacies of the business often becomes lost, as there is disconnect between the strategy of the business and the risks associated with those strategies, with the actual management of risk delegated into silos which themselves are often unconnected.
One only has to look at the risk appetite statements included in corporate annual reports to see that many of these are unquantified and therefore unusable from a true risk management perspective.
But in a world where so much trade is interconnected, and in which an event happening on the other side of the world involving, say, a tier-two supplier can have an immediate contagious effect, impacting organisations directly or indirectly connected to that tier two supplier. It is in this world, that business strategy must account and prepare for connected risk.
A solution to this could be the COI. Imagine, a COI sitting between the c-suite and the rest of the business, having at his or her disposal access to risk information from within and external to the organisation. They would be able to dynamically map risk and opportunity to the corporate strategy and thus would be effectively managing the corporate risk appetites. In fact, we are already seeing some organisations take this first step by consolidating information across internal risk silos.
With knowledge of the organisation’s risk and a direct input to business strategy, the COI will be able to help the business build resilience to and identify opportunities from potential events. Having information and data available to make ready and effective decisions as events occur or are foreseen will be critical to the success of the business. Sometimes, as in the case of the ongoing battle between on-line and the high street in the retail world, these events can threaten the very existence of the organisation. The rush to incorporate information and data in decision-making will become more and inevitable over the years, as developments in A.I. and machine-learning start to make their presence felt across all industries.
A.I. and machine learning are just some of the tools that the COI will need to truly succeed. At Russell Group, we are working on such tools to empower the COI, to deliver that finger-on-the-pulse between the aspirations of the boardroom and what the business is able to deliver within a managed risk environment. Linking the COI and the readily available enterprise risk knowledge together, is the Russell risk framework, which takes an outside-in view of the business. A framework that focuses not just on the risks but also opportunities.
If you like the content you see on youTalk-insurance why not take 20 seconds to subscribe to our free newsletter
- 21 Jan 2019
- 14 Jan 2019
- 9 Jan 2019
- 10 Dec 2018
- 3 Dec 2018
- 29 Nov 2018
- 26 Nov 2018
- 22 Nov 2018
- 15 Nov 2018
- 12 Nov 2018