Collaboration is key to successful risk management

Writing in Risk Universe, Ms Graham argued that intangible risks such as cyber, reputation and business interruption require more integrated management than traditional risks.

"These risks will only get more complex, more interconnected and change at an increasing pace - risk management needs to evolve to reflect this," she wrote. "Partly as a result of these shifts, business functions within organisations are no longer responsible for neat and succinct categories of the business – each function's remit overlaps or affects another part of the business, far more than ever before."

Ms Graham argued that this makes the job of the risk manager more challenging: "It is no longer possible for the risk function or senior management alone to be effective at identifying and assessing risks, and in particular, aggregation of risks across a business." 

Cyber risk is a case in point, according to Airmic's deputy CEO. As cyber risk penetrates every aspect of a business, almost all risks will have a digital dimension, meaning the risk and IT functions which are typically detached, will need to work together. What's more, there will be greater need for digital training to ensure key executives have enough understanding of the digital world, which will require buy-in for human resources: "HR, information technology and risk leaders have an important role to play in collaborating to ensure that education and training is appropriately targeted and delivered." 

Ms Graham noted that whilst risk managers have day-to-day responsibility for implementing the risk management system and providing help and support, it is up to the board to ensure that the appropriate systems are in place for effective risk collaboration both vertically and horizontally around the organisation. "The board also needs to ensure that an understanding of risk across the organisation is embedded and that all stakeholders realise that managing risk is part of everyone's role," she wrote.
 
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Julia Graham - deputy CEO and technical director, Airmic