Within the international risk community, there is growing concern on the approach and ethos being utilised when it comes to proper risk reporting. It seems that the monthly risk pack is often reduced to a tick-box exercise that gets one tenth of the focus and exposure it deserves.
Most companies have established risk management programmes with entrenched policies and processes but few have a real appetite for reporting risks with all perspectives in mind and they tend to gravitate towards a more self oriented view. When real risks are highlighted there is often more time spent on arguing over their very existence in relation to mitigating actions. Discussions around turning risk status indicators from orange to green are more common than we care to acknowledge. The reasons are evident on any scorecard where it is clear that we are incentivised to reduce risk where in fact there should be an equal reward for the correct identification and quantification of risk. It is the thorough understanding of all risks that increases the probability of success.
Risk should not just be viewed from the business unit context of the activity itself but in relation to the many and varied perspectives of all stakeholder interests and in relation to the strategic objectives that could be affected. In this habitat risk management would naturally adopt its real form of being a competitive enabler and assisting with decision making, planning and continual business optimisation. Good risk programmes are designed to evolve and remain current with the environment to maximise sustainable value for all stakeholders and should be embraced wholeheartedly to allow the programme to perform at its best.
The questions one needs to be asking when quietly reflecting are, “how honest are we in our risk reporting?” and “have we considered all stakeholder perspectives?”