Taking a fresh look at risk

Published on Tue, 01/05/2018 - 09:32
John Ludlow, CEO, Airmic
John Ludlow, CEO, Airmic

Airmic CEO John Ludlow calls for a new conversation at board level about what risk management really means.

Too many boards still fail to understand the true nature of risk and its potential to make businesses more profitable as well as robust, according to Airmic CEO John Ludlow.

Writing for the Raconteur risk report in The Times newspaper he says that the subject remains a turn-off for board members. "In football parlance, we are seen as the defenders who stop goals rather than the creative mid-fielders who hold the team together or the strikers who set the crowd alight. And, if we are honest with ourselves, we are partly responsible for allowing this misleading perception to develop," he writes.

"Our message is that a robust risk culture will nourish the entire organisation - providing the board with vital information and creating the platform for it to be enterprising and innovative."

In the same article he questions the way some risk managers sell their role: "Risk managers often shy away from talking about the value of their work because so much of what they do is to prevent things from happening. The trick is to move beyond something that did not happen and that, in any event, colleagues would rather not think about. Talk as well about the trusted characteristics of a brand that build up over time."

However, he praises the efforts of many risk managers - especially younger ones - who are adding wider business skills to their already formidable technical knowledge to enable them to fill the most senior strategic risk positions.

The same report highlighted Airmic's efforts to promote a debate on the role of the chief risk officer (CRO), which will be the subject of a paper to be released at June's annual conference. Deputy CEO and technical director Julia Graham echoed the messages from John Ludlow and told the publication that risk management was not just about risk prevention but "releasing opportunity and giving organisations the confidence to take more risk."  

The Airmic paper will chart the responsibilities of the CRO rather than focus on the role.  Risk management," she said, "is a relatively new profession. It has only emerged in the last ten to fifteen years....so not everyone is used to dealing with risk managers as a professional group."