Speaking to StrategicRISK, before his opening speech in Berlin this morning, Jo Willaert gives his view on the state of risk management: that their role has elevated in importance but they must get to grips with complex risks
The role of the risk manager is growing ever more crucial because of today’s shifting risk landscape, says Jo Willaert, Ferma’s president. That means that risk managers must get to grips with today’s complex risks, namely technology threats and climate change.
He said: “In the past decade, there have been a lot of dramatic changes, particularly in respect of communications and the internet, but we had some experience to guide us in how to deal with them. Today, there are risks of an unknown magnitude and impact. For every company and to every chief executive or board, risk managers have never been as crucial as they are now.”
Willaert highlighted two topics that are at the forefront of interest for many risk managers: digital transformation and sustainability. He said: “Digitalisation is much more than cyber risks, where we see risk management becoming formalised. Digitalisation and the development of artificial intelligence (AI) combined with the ever-increasing amount of data available will create significant changes for the risk profile of our organisations and for our own work. At the moment, some risk managers may still consider AI as something for manufacturers, technicians, and engineers. However, it has profound implications for risk management.”
AI is no longer science fiction; it’s already a reality,” continued Willaert. “It is a global risk issue and it’s the job of the risk manager to process and to manage this. To fulfil their potential, risk managers need to learn how they can be key actors in highlighting the opportunities and challenges of AI technologies to senior management, including the ethical dimension.”
Dealing with these evolving and emerging risks is one of the key topics of this year’s conference in Berlin, themed Aim for the future. It is also why Ferma is publishing the first guide on AI applied to risk management at the forum.
NEW IDEAS, NEW SOLUTIONS
Another core topic that will be explored this year is that of climate change and sustainability. Willaert said: “When it comes to climate change, companies are under increasingly wide pressure to reduce their impact on the environment. The EU is also driving businesses to contribute to a transition to a sustainable economy. The question is how, and at what cost? Clearly there are risks but also opportunities.”
He points out that the political scene provides further uncertainties. He said: “There is a loss of trust in some of our institutions. The full consequences of Brexit have yet to unfold, and we are awaiting the full work programme for the newly elected European Parliament and delayed next European Commission for the next five years.”
EDUCATION, EDUCATION, EDUCATION!
In the face of such uncertainty, Willaert believes passionately that the risk manager of the future will still need three qualities: communication, education and leadership.
He says that certification is one way that risk managers can demonstrate to executive management that they have a strong foundation of risk management knowledge. By having a strong knowledge basis and proof of certification, Willaert believes that risk managers can show business leaders that the risk management function is professional and can help aid better decision making.
He said that communication is a two-way street and that risk managers need to get better at listening as well as speaking. He said they must learn to listen to the needs of the company and have their fingers on the pulse so they know what is happening in every department, from legal to financial.
He concluded: “With these skills, I believe that risk managers can rise to the challenges of the future. They will add value to the continuity of the company, and will be recognised for doing so.”
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