RiskNZ summit tomorrow exploring the upside of risk

September 13, 2016

Major power failure, an Alpine fault earthquake or a big jolt in Wellington are typical of the biggest risks New Zealand risk managers worry about but they are just two of many natural, technological and human-induced threats to be considered, Risk New Zealand chief executive Tim Jago says.

Risk New Zealand, the peak sector and professional body in New Zealand bringing together people and organisations managing risk, surveyed its members on the subject.

They will be discussing risks faced by New Zealand at their Development Day summit in Wellington on Thursday. The event will explore the upside of risk and how opportunities can be leveraged by embracing risk through effective risk management.

Jago says risk management is not as simple as identifying a threat or hazard and isolating it. Today’s risk managers are challenged with assessing a multitude of influencing factors, weighing up options, presenting scenarios to chief executives or boards and working with them to arrive at acceptable levels of risk that see opportunities able to be seized that previously might have been discarded as simply unacceptable.

“New Zealand by all accounts is performing better than perhaps any other economy, anywhere globally. We are in a great position to expand our production and reach into international markets, but we need to understand and manage our way around the risks. We need to know the risk paradigm that exists offshore just as well as we know the risks that exist inside New Zealand, or inside the business itself.

“Our development day tomorrow is an opportunity for risk management practitioners to learn from acknowledged experts from New Zealand and abroad, and to have our local best practice approaches to risk management showcased against some offshore exemplars.

“Today’s risk manager needs to be a master generalist, able to comprehend a variety of complex threats to business, society and the environment in which we live. They need to be cognisant of the geopolitical situation at domestic and global levels. They need to understand the threat picture as it relates to their specific enterprise, they need to know the operational detail of their business and what risks exists to business continuity at every level.

“A common misconception is that company risk managers address very tangible threats and hazards such as earthquake or power outage preparedness, or a better more recent example might be cyber security or local supply chain disruption.

“Actually, the risk matrix today can be just as much about the geopolitical situation in Europe involving Brexit and the European Union migration crisis and its implications for export markets, or about protecting professional or commercial reputation. The former are about being able to manufacture goods, the latter is about being able to actually sell the goods. They need to go hand in hand.

“The RiskNZ development day is about presenting both sides of the story, heavy on context and recent case studies, and enabling risk managers to go away enlightened and better equipped.

“RiskNZ is firmly of the belief that effective risk management is not simply about risk avoidance, or ensuring compliance with safeguards imposed by regulation. RiskNZ wants commercial enterprise in particular – our business leaders and owners – to actually think about the risk matrix, and instead of instinctively shying away from risk to go through a robust process of examining the risk and all that it might present, to see if there is a feasible way of moving ahead with an acceptable level of risk,” Jago says.

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