Are you robust enough to handle these risks?

The importance of risk management has grown exponentially since the start of the pandemic, admittedly with a shift in focus for certain areas. We feature some of the top risks for 2021 and get a lowdown on the role of risk management in combating these.

With ransomware attacks filling the headlines and the Covid-19 pandemic pushing organisations to embrace remote working and online business models, cybersecurity has become a top-of-mind concern for many business leaders. It should come as no surprise, then, that cyberattacks and data breaches rank first on the list of the top 10 risks in Aon’s 2021 Global Risk Management Survey (which drew online responses from 2 344 risk decision-makers from 16 industrial sectors, representing small, medium and large companies across 60 countries).

The rest of the list is as follows:
2. Business interruption;
3. Economic slowdown/slow recovery;
4. Commodity price risk/scarcity of materials;
5. Damage to reputation/brand;
6. Regulatory/legislative changes;
7. Pandemic risk/health crises;
8. Supply chain or distribution failure;
9. Increasing competition; and
10. Failure to innovate/meet customer needs.

“The impact of the Covid-19 pandemic has demonstrated the interconnected nature of risk. Risk profiles have been and continue to be in a state of flux as businesses and economies emerge from the pandemic,” says Rory Moloney, COO of global enterprise clients at Aon. “As our survey shows, long-tail risks have become an important part of the risk landscape, with ripple effects already seen in heightened awareness of reputation and pandemic risk as well as cyber, which has magnified due to an accelerated reliance on technology, as well as impacts to global economics and trade as businesses all over the world went into unprecedented lockdowns.”

It’s no wonder that the importance of risk management is being escalated to board level, as emphasised by Justin Nash, group managing director of IRCA Global – an international risk management solutions provider specialising in operational risk management.

“Topics such as reputational risk, as a result of non-compliance with relevant health and safety standards, has become a very important factor,” he says. “Governance requirements are more important than ever, taking into consideration that reporting is now required on the three pillars – not only finance but also people and the planet.”

Nash adds that it is important to understand the concept of enterprise risk management. “This is divided into two major categories, speculative risk (largely financial) and pure risk (operational). IRCA Global is focused on pure risk reduction. For organisations to remain successful it is important to look at all elements (top to bottom, bottom to top and inclusive), bearing in mind that pure risks can most definitively have devastating effects on speculative decisions.”

This is why it is important that organisations, when looking for a risk management solutions partner, ensure that they find a service provider that understands their business in context with their environment. “It is key to follow a risk-based approach and, of course, ensuring the service provider is a sustainable vendor,” Nash tells SHEQ MANAGEMENT. “It is of utmost importance that a risk-management consulting group remains innovative and at the forefront of technology.”

He says that IRCA Global offers a full turnkey solution for operational risk management (occupational health, safety, risk and quality management). “IRCA is driven by excellence; our international footprint ensures that we keep on innovating and learning to stay ahead of risk.”

The company divisions cover the following:

• Risk assessments (enterprise-wide risk management);
• Consulting (management system design and implementation, specialised consulting, professional outsourcing of safety specialists and investigations);
• Training (MERSETA, DOL, QCTO and Saiosh accredited);
• Behaviour based safety/care;
• Business continuity management;
• Auditing/assessments; and
• Software solutions.

IRCA Global brings a wealth of experience, as it has been offering risk management solutions since 1993. Nash adds that the industry has changed quite drastically during this time. “Including, but not limited to the introduction of technology, the context of the organisations, legislative changes, labour unions, societal demands, consumerism, community involvement, workforce changes, best practices, medical research and international standards.”

The most notable change is the one that took the world by storm … “The effects experienced are both positive and negative. There is no doubt that, globally, industries have suffered tremendously, but there is also a positive side to the pandemic – people understand now, more than ever, the importance of their own safety.”

And by highlighting the interconnectedness of a large number of risks, the Covid-19 pandemic has shown that preparing for each peril on its own is insufficient. In today’s global marketplace, a variety of perils can pose systemic threats and need to be assessed, managed and monitored in an integrated way at an enterprise level.

“The future remains open for effective risk management. Pure risk will always be present,” Nash points out. “Continuity and quality solutions will ensure the survival of an organisation.”