good - Blog - Global Risk Community2024-03-29T13:09:23Zhttps://globalriskcommunity.com/profiles/blogs/feed/tag/goodParis Climate Accord Debate: Tone from the Top or Not?https://globalriskcommunity.com/profiles/blogs/paris-climate-accord-debate-tone-from-the-top-or-not2017-06-07T20:30:00.000Z2017-06-07T20:30:00.000ZSteven Minskyhttps://globalriskcommunity.com/members/StevenMinsky<div><p><a href="http://www.npr.org/sections/thetwo-way/2017/06/01/531048986/so-what-exactly-is-in-the-paris-climate-accord" target="_blank"><img width="300" src="{{#staticFileLink}}8028258874,original{{/staticFileLink}}" class="align-right" alt="8028258874?profile=original" /></a>At lunch recently, I opened my fortune cookie and found this message inside: “Any journey must begin with a single step, and you can be the one to take it.” That simple message inspired me to write this blog.</p><p>Events taking place after the Trump administration withdrew from the Paris climate agreement have demonstrated there is more than one way to get things done.</p><p>A few mayors throughout the country individually decided to take action. Now, the movement has blossomed, and more than 200 mayors, seven governors, and the state of California have stepped up to meet the Paris climate accord obligations.</p><p>Emissions come mostly from cities and their dense populations. If these cities operationalize climate policies themselves, emissions will be reduced – regardless of whether or not the Paris Agreement has executive support.</p><p>This reminds us of an important fact: formalized, centralized support, whether from the federal government or a corporation’s board, is not required to implement a policy. The front-line operating departments are where the rubber meets the road in terms of real action.</p><p></p><p><strong><span class="font-size-3">Just Because It Can't Be Done the "Normal" Way Doesn't Mean It Can't Be Done at All</span></strong></p><p>Recently, headlines have been filled with outrages and scandals related to poor governance. The <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/09/20/wells-fargo-scandal-risk-management/">Wells Fargo</a></span> accounts scandal, the <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2015/10/05/volkswagen-enterprise-risk-management-accountability/">Volkswagen emissions scandal</a></span>, and the <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/02/09/chipotle-case-study-risk-management/">Chipotle outbreak</a></span> are just a few examples of what can result from poor governance and risk management.</p><p>Employees around the world may look at events like those listed above and think, <em>How could my own actions, or even my team’s actions, possibly influence such large-scale events? </em>After all, if senior leadership doesn’t prioritize risk management and the prevention of surprises, isn’t it next to impossible for individual departments to take action?</p><p><span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2017/04/25/good-governance/">Good governance</a></span> and all its attributes can exist at any level. Front-line managers, the operational level, are the biggest influencers on the achievement of strategic goals.</p><p>When you see an opportunity for improvement at your organization, how are you going to act? Unification through a common cause – whether within or across departments – is a powerful catalyst for change.</p><p>The 211 mayors that have continued to support the Paris climate accord are a source of inspiration and evidence that #goodgovernance is powerful at the operational level.</p><p>Stepping forward and fighting to manage tomorrow’s surprises today can and should be done – with or without the “tone from the top.”</p><p>Enterprise risk management is never a check-the-box exercise and is more than a just a process. It’s a mission to fight negligence, prevent scandals, and create empowerment by turning outrage into positive outcomes. We can put an end to endless meetings, the politics of resource allocation, and the dysfunction of disparate, tedious processes in silos that threaten our livelihood and what we believe in.</p><p>We are not innocent bystanders and we are not powerless. We are the “mayors” of our working groups at our organizations. We demand good governance, and ERM is the best way to achieve it.</p><p></p><p><strong><em>Learn more about how to take your next step for better governance with </em></strong><span style="text-decoration:underline;"><a href="http://www.logicmanager.com/build-business-case-for-erm-software-ebook/"><strong><em>enterprise risk management</em></strong></a></span><strong><em> at your organization.</em></strong></p><p></p><p><strong><em><br /></em></strong> <em><a href="http://www.npr.org/sections/thetwo-way/2017/06/01/531048986/so-what-exactly-is-in-the-paris-climate-accord" target="_blank">[image from npr.org]</a><br /></em></p></div>What Is Good Governance, and Why Do We Care?https://globalriskcommunity.com/profiles/blogs/what-is-good-governance-and-why-do-we-care2017-04-25T19:09:14.000Z2017-04-25T19:09:14.000ZSteven Minskyhttps://globalriskcommunity.com/members/StevenMinsky<div><p><a href="{{#staticFileLink}}8028257055,original{{/staticFileLink}}"><img width="275" src="{{#staticFileLink}}8028257055,original{{/staticFileLink}}" class="align-right" style="padding:2px;" alt="8028257055?profile=original" /></a>Governance is defined by the organizational processes used to make and implement decisions. Good governance is not necessarily making only the “correct” decisions. It’s using the best possible risk management process to inform decision-making, which has the potential to impact employees, customers, other stakeholders, and the community at large.</p><p>Optimizing organizational governance is not just recommended, it’s a moral and legal obligation. Every company, no matter its industry, product, or service, impacts every party mentioned above. Good governance – by holding each part of the organization to a high standard and by enabling surprises to be managed <em>before </em>they happen -- ensures this impact is positive.</p><p>The consequences of bad governance are manifold. Corporate scandals have dominated headlines in recent years. These failures would have been prevented if companies had governed themselves more responsibly. Instead, poor risk management and inadequate governance led to scandals including those at <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/09/20/wells-fargo-scandal-risk-management/">Wells Fargo</a></span>, <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2015/10/05/volkswagen-enterprise-risk-management-accountability/">Volkswagen</a></span>, <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/06/02/risk-management-negligence-accident/">Plains All American Pipeline</a></span>, <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/04/13/risk-management-negligence/">Dwolla</a></span>, <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/02/09/chipotle-case-study-risk-management/">Chipotle</a></span>, <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2016/07/28/wendys-data-breach/">Wendy’s</a></span>, and <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/2013/12/23/erm-report-targets-breach-an-needless-mishap/">Target</a></span>.</p><p>This trend can and must change. Poor governance affects all of us and is never excusable. It’s negligence, and a company that allows a scandal to unfold through negligence is not just being unjust, it’s violating its moral obligation to its stakeholders and community.</p><p>Tragedies will inevitably happen, but tragedies are unforeseeable realities of life. Scandals, on the other hand, evoke the outrage they do because (unlike tragedies) they are avoidable.</p><p>We’re fighting to make a change. LogicManager was founded on the belief that <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/grc-software/risk-management/">enterprise risk management</a></span> is the key to implementing and sustaining good governance. Our mission is to provide the tools and services that make this possible. Below, we’ll outline the important characteristics of good governance.</p><p></p><p><strong><span class="font-size-3">What Are the Main Characteristics of Good Governance?</span></strong></p><p></p><p><strong>Good governance creates accountability.</strong></p><p>Accountability is a fundamental requirement of good governance. Businesses have an obligation to <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/product/assess/">identify and assess</a></span> risk, implement appropriate <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/product/mitigate/">controls</a></span>, <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/product/monitor/">monitor</a></span> their effectiveness, and regularly <span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/product/dashboard-reports/">report to the board</a></span>. Managers throughout the company need to be answerable for the consequences of risks, which impact customers, employees, and investors the organization serves.</p><p></p><p><strong>Good governance is transparent.</strong></p><p>As part of the risk management process, any employee should be able to escalate a concern, issue, or complaint for review. This means they’ll be able to clearly see:</p><ul><li>The status of an identified risk</li><li>What risk assessment and mitigation activities were reviewed</li><li>Which standard(s) were followed</li></ul><p></p><p><strong>Good governance saves money.</strong></p><p>Scandals are caused by negligence, and are therefore 100% preventable. Good governance protects the organization’s reputation, avoiding consequences such as lost revenue, higher operating costs, and even class action lawsuits. Such lawsuits, initiated by customers and investors, are often accompanied by regulatory scrutiny and penalties.<strong> </strong></p><p></p><p><strong>Good governance is responsive.</strong></p><p>Corporations must focus on customer needs while balancing competing interests in a timely, appropriate, and responsive manner. Enterprise risk management is as much about achieving goals as it is preventing scandals.</p><p><strong> </strong></p><p><strong>Good governance is equitable and inclusive.</strong></p><p>A customer and employee community’s well-being results from all of its members feeling their interests have been considered by management in the decision-making process. This means all customers, employees, and investors should have opportunities to escalate concerns as part of the risk management process.</p><p><strong> </strong></p><p><strong>Good governance is effective and efficient.</strong></p><p>Corporations should implement decisions and follow processes that make the best use of available people, resources, and time. This ensures the best possible results for customers, employees, and investors.</p><p><strong> </strong></p><p><strong>Good governance is participatory.</strong></p><p>Employees, vendors, or contractors performing tasks in a process should have the opportunity to provide subject-matter expertise as part of regular risk, control, and monitoring assessments. This is accomplished by providing a risk assessment to frontline supervisory employees and vendors, which require them to:</p><ul><li>Identify risks in their areas of operations</li><li>Identify what could go wrong</li><li>Provide their expert opinion on impact and likelihood, along with the effectiveness of current controls designed to prevent those risks from happening.</li></ul><p></p><p><strong><em>Learn more about the </em></strong><span style="text-decoration:underline;"><a href="http://www.logicmanager.com/erm-software/product/risk-based-process/"><strong><em>risk-based process</em></strong></a></span><strong><em> and why it’s a critical component of sustainable good governance.</em></strong></p><p></p></div>Taking Control of Our Moneyhttps://globalriskcommunity.com/profiles/blogs/taking-control-of-our-money2015-10-08T16:49:00.000Z2015-10-08T16:49:00.000ZEnrique Raul Suarezhttps://globalriskcommunity.com/members/EnriqueRaulSuarez<div><p></p><p><a href="{{#staticFileLink}}8028238668,original{{/staticFileLink}}"><img width="192" class="align-center" src="{{#staticFileLink}}8028238668,original{{/staticFileLink}}" alt="8028238668?profile=original" /></a></p><p></p><p class="center" style="text-align:center;"><span class="font-size-3"><strong>Taking Control of Our Money</strong></span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-3">Source:</span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-3"><strong>Public Banking Institute</strong></span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"></p><p>This is a great introduction to public banking. America has plenty of money--but it's all under the control of private banks. This video uses economic reality, clips from "It's a Wonderful Life," and other methods to bring home the key points that banks create the money they lend, and that the privatization of finance has been a disaster. It explains public banking's potential to lower the costs of funding public goods--because, after all, it's our money. </p><p></p><p>Our sovereign currency and credit has been usurped for private gain instead of public good. Let's take back control of our money from Wall Street and build prosperity on Main Street by creating state, county, and municipal public banks. Public tax monies should be leveraged by public officials, not speculators and swindlers. Check out <a href="http://www.publicbankinginstitute.org/" target="_blank">http://www.publicbankinginstitute.org</a> for more information.</p><p></p><p>You can watch the video at: <a href="https://www.youtube.com/watch?t=79&v=IvTDTL55K1U" target="_blank">https://www.youtube.com/watch?t=79&v=IvTDTL55K1U</a></p><p></p><p></p><p></p></div>Risk Leadership: Recommended Readinghttps://globalriskcommunity.com/profiles/blogs/risk-leadership-recommended-reading2013-08-29T11:14:35.000Z2013-08-29T11:14:35.000ZBryan Whitefieldhttps://globalriskcommunity.com/members/BryanWhitefield<div><p><span style="font-size:10pt;">I was recently asked by a young risk professional for recommendations on good books on risk. Here is my short list:</span></p><div><span style="font-size:10pt;"><br clear="none" /><em><strong>Against the Gods – The Remarkable Story of Risk</strong></em>, by Peter Bernstein – A great story as well as very informative.<br clear="none" /></span></div><div> </div><div><span style="font-size:10pt;"><em><strong>The Black Swan</strong></em>, by Nassim Taleb – Some truly interesting concepts that risk professionals must understand. It is heavy going at times as you need to wade through what I found to be not so entertaining storytelling.<br clear="none" /></span></div><div> </div><div><span style="font-size:10pt;"><em><strong>The Failure of Risk Management</strong></em>, by Douglas Cubbin – Really challenges the norm and heavily promotes quantification of risk – something all of us should be thinking more about given the truth that our subjective judgements on risk are often wrong because of our psychological biases (see next book on this list).<br clear="none" /></span></div><div> </div><div><span style="font-size:10pt;"><em><strong>The Psychology of Judgement and Decision Making</strong></em>, by Scott Plous – Not strictly a risk book, however, comprehensive in its coverage of our biases and extensively references Daniel Kahneman who is known as one of the forefathers of Behavioural Economics (see two books down for his most recent book).<br clear="none" /></span></div><div> </div><div><span style="font-size:10pt;"><em><strong>The Art of Choosing</strong></em>, by Sheena Iyengar. Excellent book with lots of great background on why we sometimes have difficulty choosing – different enough to the books on the psychology of judgement etc to be worth a read.<br clear="none" /></span></div><div> </div><div><span style="font-size:10pt;"><em><strong>Thinking Fast and Slow</strong></em>, by Daniel Kahneman. Again not strictly a risk book yet clearly spells out some techniques to manage our pyschological biases and enhance our risk-based decision-making.<br clear="none" /></span></div><div> </div><p><span style="font-size:10pt;"><em><strong>Inviting Disaster</strong></em>, by James Chiles. This book does not cover any technical aspects of the risk management discipline. It is an investigation into the causes of some of the most famous disasters in modern history. I have used many of these stories when running engagement workshops for management and staff.</span></p><p></p><p><span style="font-size:10pt;">If you would like to recommend a good book on risk, please comment below.</span></p><p></p><p><span style="font-size:10pt;"><a href="http://www.rmpartners.com.au">www.rmpartners.com.au</a></span></p></div>