Members want more strategic clout

The majority of risk professionals want more opportunity to influence strategic decisions as the world becomes increasingly volatile and complex, the Airmic 2019 survey has found.

More than three-quarters (76 percent) of respondents identified influence as the opportunity they’d most like to see made available in their role, for example by having more contact with the board.

“That chimes with risk managers and risk organisations realising that risk professionals aren’t just about spotting what could happen—they can also spot opportunities for reward,” Richard Cutcher, research and development manager at Airmic, told Airmic Today.

This desire to have a greater role in shaping strategy is related to the intangible nature of current major concerns and megatrends, he said.

“Examples of these include geopolitical tensions, which the survey identified as being the hardest to risk manage, and climate and environmental disruption. For risk professionals it can be quite a big problem to get your head around them; you need to plug into the wider organisation to do that,” he explained.

“Risk managers can’t do that sitting in a room, they need to be out there talking to the rest of the organisation and collaborating, not just with different departments, but with the board more regularly about strategy and the way things are going.”

Future issues

Another huge intangible risk flagged up in the survey is reputational risk and risk to brand value. Cutcher said this has been a top business risk for the third year in a row.

61% think loss of reputation will still be a top concern in three years
It is also the top risk for 76 percent of respondents in the next 12 months, and the top business risk 61 percent of respondents said they expected would still be on their minds in three years’ time. “This one is not going away,” Cutcher added.

Cyber risk was prominent in the results of the 2018 survey and it is still a major concern.

“It was second to loss of reputation, with 56 percent identifying business interruption following a cyber event as a concern in the past 12 months, while 54 percent identified it as being a concern in the next three years.”

These findings link to what Airmic members believe their board is most concerned about: data security, with 68 percent putting it as number one. This was followed by compliance and the UK’s departure from the EU.

“Our members tell us that in terms of political risk, Brexit is high on the agenda, with boards meeting monthly to address it, and this is reflected in their hypothetical ‘nightmare headlines’, such as ‘Brexit no deal’; ‘Major data breach at retail owner, 4 million customers’ data lost’; and ‘Supply chains crippled by Brexit’,” the report states.

Publicity and debate about climate change continue to push the concern up the agenda. However, the survey report says: “The climate change debate does not appear to have cut through to the board. Airmic members recognise that the associated risks to the business are going to become harder or significantly harder to manage over the next three years, but only 9 percent of respondents identified climate change as the top concern within the boardroom.”

On the future of the profession, the survey showed linear development from the 2018 results.

In 2018, members said they wanted to transform/develop from being a technical asset to being a strategic business asset in the organisation.

“In the survey this year we asked respondents to identify some of the skills they thought they would need to do that,” said Cutcher.

“Among the top skills identified were communication and influence. Other skills were cross-functional business experience and understanding, and commercial and financial acumen.

“Our members are starting to think that having identified that they want more strategic business influence, these are some of the skills they want to develop to get there,” he concluded.