As members may be aware, I am here ‘Down Under’ attending the Risk Management Institute of Australasia's 8th Annual 2011 Conference, on behalf of the Global Risk Community. Global Risk Community is the offical Media Partner for the event.
Over 470 delegates from Australia, New Zealand and Asia have gathered at Crown Casino's conference facilities, on the banks of Melbourne’s Yarra River.
Highlights of Day 1 for me were:
John McAneny of Risk Frontiers talking about what risk managers need to know about Natural Disasters and global climate change. Risk Frontiers (formerly the Natural Hazards Research Centre) is based at Sydney’s Macquarie University and is regarded as a world leader in quantitative natural hazards risk assessment and risk management.
Catherine Walter, a prominent Non Executive Director in Australia spoke at Marsh’s Business Breakfast about the "desire of Boards to look into risks in each business in a granular way”. Importantly, Catherine said that it was all about understanding Process, People and Culture with an "emphasis on People".
Catherine also noted that it was “interesting to see an evolving link between the remuneration committee and the audit committee to ensure that the remuneration structure for executives doesn’t drive the wrong outcomes”. Catherine felt that by having remuneration arrangements that rewarded the pursuit of growth at all costs is usually when things “unravel”.
Richard Hearn, Group Risk Manager at Minerals & Metals Group highlighted that risk management as a practice was now “moving from just holding up the Risk Register that have a list of risks - to an understanding of what the risks are”. The question to be asked by risk managers according to Richard is “I know the risks but what are you doing about them?”.
Richard also added that the tone from the top was important stating that “unless you had the full support of the Board on risk management you will not effectively manage risk management and drive change”.
David Lamont, Chief Financial Officer of Minmetals Resources Limited, also on the panel at the Marsh Business Breakfast, stated that it was “important not to get caught up in the compliance process” in an environment where Governments were looking to impose themselves in the risk process.
Nick Chipman, Partner at PWC, gave a comprehensive presentation on the link between business strategy, operations and risk management. Nick particularly highlighted the risks involved in ‘business as usual’. Many risks that manifest themselves are from operational issues and difficulties that many consider to be ‘normal’ operating conditions. Nick also highlighted the complexity in many operating environments in the mining and oil & gas industries.
Kai Dwyer from Zurich Financial Services gave a fascinating overview of Zurich’s ‘Risk Room’. The Risk Room was launched by Zurich in 2009 at the World Economic Forum in Davos. It models and simulates a large number of economic, political, social and business risks across 158 individual countries. It is a tool to identify and assess country risk, helping organisations assess where to expand internationally.
Kai’s presentation drew the most questions from the audience for any of the sessions I attended, all about various country risk issues. Interestingly, Kai put up some back testing they had undertaken that showed the extreme risk profiles of Libya, Egypt and Syria calculated by the Risk Room in 2010. Whilst not quiet able to predict the Arab Spring or its timing, it clearly indicated that trouble was on the horizon.
There were many other sessions of interest – too numerous to list here. Look forward to providing another update tomorrow.
Peter Deans.
For the record (for those that read my blog on Sunday), despite seeing many golfers from the Presidents Cup who were here on the weekend, I didn't manage to sight Tiger Woods. But as one member noted, who cares about Tiger Woods these days anyway...
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