4 Ways to Revolutionize Risk Management

In an uncertain climate where risk is rife, the call for a more holistic approach to risk management has never been greater.

Despite new risks having emerged amid the volatile global environment, existing risks such as cybercrime and climate change haven’t gone away. Compounding this are new regulations on the horizon, such as those recommended in the Brydon Review in the U.K., where it’s likely we’ll see increased scrutiny over risk management, compliance and internal controls in the coming months.

The rapid pace of change in the past year has undoubtedly created significant short-term challenges for organizations worldwide, but only now are the long-term consequences beginning to manifest themselves.

Arguably, Covid-19 has highlighted deficiencies in risk management that otherwise might never have been brought to light. What’s clear is that those who have taken a more dynamic and frequent approach to their risk practices have been better able to future-proof their business and tackle the ongoing turbulence initiated by the pandemic.

Here are some ways organizations can enhance their performance in four of today’s key risk areas, while maintaining rigorous compliance and agility:

Innovation risk,..

As innovation rises, so too do risks. Yet conversely, the risk of not innovating can be just as high. This places a considerable onus on risk managers to help their organizations strike the right balance between risk and reward.

Due to the nature of innovation, propositions are often in a constant state of development, rendering point-in-time engagement from risk executives impractical. For risk management to be effective, it must be embedded throughout the development process, with continuous interaction between risk and innovation teams. Furthermore, risk controls should be an integral part of product design, especially in the face of regulations such as GDPR, which maintains “privacy by design” as one of its leading principles.

Innovation risks undoubtedly alter the risk profile of an organization and potentially fuel other technology-related risks such as cybercrime and fraud—creating another strong case for implementing new risk controls and a wider discipline of digital conduct.

One prime example of innovation risk managed well is offered by e-commerce giant JD.com, whose radical advances in mitigation technology and robotics have increased the retailer’s stock price by 97% in the past year.

Cybersecurity risk

At the same time that organizations are expanding their digital footprints, cyber threats are growing exponentially in their sophistication. Although this has largely made traditional risk management frameworks unworkable, a data-driven approach can help businesses to better quantify cyber risk and sense check their cyber-response capabilities.

Data can be derived from multiple sources including audit findings, threat intelligence tools, asset life cycles and defect management to help build a real-time picture of risk, while providing key insights to the security team and senior leaders for more informed decision-making.

That said, a cyber-risk framework is only as good as an organization’s first line of defense: its valued employees. An all-hands-on-deck style is the surest way to instill a culture of cybersecurity accountability at all levels of the business, supported through training courses and robust policies to raise awareness of today’s ever-evolving cyber risks.

By identifying and addressing vulnerabilities before they become an issue, risk professionals can reduce the likelihood of their organization being a sitting target and thus protect their end clients as they continue their digitalization journey.

ESG risk

Rising expectations from stakeholders in recent years have indicated that high environmental, social and governance (ESG) performance can lead to improved profitability and business opportunities.

Microsoft is one such case in point, becoming the first company in its sector to target a “carbon negative” status by 2030. Since creating a $1 billion fund to reduce emissions and carbon usage, Microsoft received the highest ESG rating (AAA) from MSCI ESG Research in 2019.

A failure to incorporate ESG—covering a wide set of issues—into enterprise risk management practices could see businesses lagging behind their peers, particularly if they do not make the connection between ESG and materiality.

While laws and regulations mandating disclosure are a key driver for putting forth a robust ESG strategy, businesses should adopt an approach that transcends simply meeting compliance requirements. A critical starting point is to develop a purposeful culture around ESG that is exemplified at the top and instilled throughout the organization.

Board oversight is also crucial to the effective integration of ESG risk management and subsequent long-term sustainability. Senior leaders should work closely with risk teams to monitor ESG performance against the company’s goals, making activities such as megatrend analysis, media monitoring and regular ESG materiality assessments a core part of the wider ERM framework.

Continue Reading About risk management

Regulatory risk

With the regulatory landscape changing rapidly, businesses that rely on antiquated, reactive ways of managing compliance risks could open themselves up to a host of negative repercussions, from both a financial and reputational standpoint.

However, an integrated compliance framework facilitated by technology can not only enable companies to be more risk-intelligent, but can also help keep compliance standards in check, ensuring that policies are adhered to at all levels of the organization.

Coupled with a best-practice strategy for managing regulatory compliance risk, today’s advances in automation and regtech can provide a 360-degree view of compliance while delivering meaningful insights and highlighting gaps in processes or deviation from policy.

Moreover, as authorities place increased focus on the quality and completeness of regulatory data, businesses will need to show that they have systematic controls and tools in place to provide accurate regulatory and compliance reporting. By putting transparency at the heart of regulatory risk management through digital means, organizations can have the confidence that their regulatory obligations are being met, mitigating the chance of them falling afoul of noncompliance.

With a focus on high-level risks as well as the more granular impact of risk across the board, businesses will not only benefit from a competitive advantage in future, but also greater resilience and compliance in times of extreme disruption. Are you ready for a risk management revolution?

Discover Ideagen’s market-leading Pentana Compliance solution and how it can help to protect your financial services organization from regulatory risk.

Gordon McKeown

Gordon McKeown, Head of ARC Product, Ideagen

This article originally appeared on Business Reporter. Image credits: Header image: iStock 1181145608. Headshot: Courtesy of Ideagen.

Source: 4 Ways to Revolutionize Risk Management

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Bringing Men Out of Isolation with Empathy and Accountability – Justin Lioi

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The mass of men lead incredibly isolated lives these days. One seemingly no-brainer solution is for men to connect with other men wherever they can: MeetUp groups, local bars, softball teams, etc.

While there’s nothing inherently wrong with this idea, it’s not enough, and can actually end up doing more harm than good. Men need to be grounded in an analysis of patriarchy and oppression and unless this happens at the same time (or before) they come together in groups these new friendships and coalitions run the risk of reinforcing the same oppressive systems that are already in place.

The Invisibility of Patriarchy (at least, to the Patriarchy)

Men don’t talk about their feelings., so the stereotype goes. Well, they do talk about anger. They certainly complain. If they’re straight, they complain about their female partners. Saying they’re too needy. Always wanting them to do something they don’t want to do. Not having enough sex.

That’s fine. It’s fine for people to talk about what they want and what they are not getting. There’s no good reason to shut down anyone from expressing their wants and desires, their frustrations and irritations. The problem comes about when there’s no deeper exploration of all of these things. When you’re around your local bar or when you’re at softball practice it’s likely no one is analyzing relationships (I’d love to hear about exceptions, though!) Complaints are either being heard and left alone or they’re being fired up and intensified.

It’s an echo chamber and nothing gets shifted or worked on.

I often get asked if getting men together to talk is enough: “Forget therapy, forget groups, just get men together. Let them build relationships with each other and then things will go well. Society will move forward. We just all need to talk.”

The problem is that oppression and privilege is often invisible to the people who have it. If they are not continually brought back to examine it—if the fish is not constantly told they are swimming in water—they don’t realize it’s there and they think that society really is a meritocracy.

Empathy & Accountability Are Both Required

For groups of men coming together to be effective two things need to be present. They need to be able to do some of the above—express their anger, annoyance, irritation—even if those feelings could be heard by some as unacceptable (which is why we should do it in male spaces so we don’t continue to subject women to this). Only bad can come from repressing all of that. It’ll just come out in some other way: resentment or violence, to name a few. I’m not making excuses for it, but “holding it in” has never worked out well for anyone.

The second important part of this coming together is to not stay there. Men need to be open and less defensive when there is some pushback around the underlying premise of what’s being said. Not, “You shouldn’t say that. How dare you feel that way.” But more along the lines of, “Ok, I hear that, but let’s take a look at where your anger is directed. What might we all be missing here and what is the other person seeing that isn’t as apparent to you?”

Accept the feeling, but challenge the premise from where it arises. Buddies and groups of people without an analysis tend to stay in the anger/resentment without pushing forward. They practice their anger and annoyance without holding each other accountable.
And we all stay stuck.

There’s a stereotype in politics that the left is all about “bleeding hearts” and the right is only about “personal responsibility”. I’m not here to challenge political stereotypes, but I know that for growth—personal and communal growth—we need both. We need to empathize while also holding ourselves and others accountable. One or the other does nobody any good.

So, yes, men need to come together into groups. They need to come out of isolation and give up the myth of full independence, but they need to do so outside of the space that reinforces patriarchy and inside the space that moves us forward.

 

 

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Feel More Valuable: 3 Ways to Raise Your Self-Worth – David Meltzer

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Whether in business or your personal life, feelings of unworthiness can hamper your ability to shine. When we don’t perceive ourselves as worthy, we tend to self-sabotage and avoid going for (or asking for) what we deserve.

My good friend, entrepreneur Ed Mylett, shared an idea with me that I thought was extremely powerful. He described different things in our lives that have a thermostat: our financial success, weight and especially our self-worth.

The premise is simple. Even if your self-worth increases or decreases a few degrees, or you experience a tremendous change over time, you will eventually revert back to whatever your internal success thermostat is set at. This begs the question: “What can I do to raise my internal thermostat?”

1. Provide value and feel valuable.

The first and best way to improve your feelings of worthiness is simply to provide value to others; be kind to others as well as to your future self. Be of service, which means providing value with no expectations of receiving anything in return. It contains the requirement that you give unconditionally. Giving with expectation, as my friend Bob Proctor says, is trading and not real giving.

It’s essential to have both focus and intention on what we want, in order to get it. And it’s difficult to manifest what you want without being of service to others. Providing value by being of service creates a void that the universe will fill for you.

Giving not only makes you feel good, but this altruistic act is contagious. Giving makes you happy, makes the person who receives happy, and even those who witness giving become happier.

A study tracking 2,000 people over a five-year period, found that those who described themselves as “very happy” were the ones who volunteered 5.8 hours per month, on average. Providing value for others made those individuals feel valuable themselves.

2. Keep your promises.

Part of being of service is keeping promises that you make to yourself, as well as what you promise to others. Living up to your promises builds trust from others, and confidence in yourself, which leads to a better perspective of your worth. When you set achievable goals and put plans in place to meet them, you’ll experience a higher rate of success and simultaneously turn up your worthiness thermostat. You need goal setting (and promise keeping) to be a consistent, persistent behavior, which will then allow you to enjoy the pursuit of your potential by creating objectives and meeting them.

One of my favorite examples to demonstrate this idea involves working out. Many people try to go “all in” immediately on new exercise regimes. I take an alternative approach. I set the bar very low at the start.

The first day that I started working out, I made a promise to myself that I’d put on my workout shoes. That was it. But, that first day, not only did I put all my gear on, but I actually ended up doing 30 minutes of cardio and stretching; I felt great afterward.

The next day, I wanted to increase my progress. I set a goal to put on all my workout clothes. But, once again, I made it to the gym and overachieved even more.

By keeping simple promises like these, and then going above and beyond, you not only build confidence in yourself but also your ability to follow through. You feel good that you are an achiever, and you feel worthy and capable of even greater achievements.

3. Accountability means knowing you’re worthy.

Living with accountability is yet another way to improve your feelings of self-worth. Accountability gives you the power or control over everything in your life. Accountability means that you don’t live in a world of blame, shame or justification. Rather, you take on all challenges as an opportunity to learn and grow.

People who are accountable ask themselves two questions when those challenges arise:

  • What did I do to attract it to myself?
  • What am I supposed to learn from it?

The tendency of people to go “below the line” stems from the impulse to defend their ego. But, in reality, they’re just avoiding accountability. Going below the line is a guaranteed way to lower your thermostat.

Whenever you can, invite others to help keep you accountable. Whether it’s a spouse, a coworker or a coach, ask them to make sure that you stay on track with achieving your goals.

If you cannot find a group or someone you trust to help keep you accountable, keep track of your words and actions yourself. Journaling is an effective way to do this. Just make sure to be honest with your evaluation of your performance.

4.Raise your thermostat.

If you want to make a lasting improvement to your self-image and raise your thermostat of worthiness, embrace the principles of service, keep promises you make to yourself (as well as to others), set realistic goals that you can achieve, but keep raising the bar. Finally, take charge of your life by being accountable and living above the line of blame, shame and justification.

These strategies are well worth your time if you want to build your self-worth, feel like you are deserving, and consistently, persistently, rapidly attract the great things that are coming your way.

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