The caption of the topic would probably sound a little queer, coming from one who sees himself as a certified CRO (as it is called probably in the hyper parlance of the Institute of Risk Management, London!) or at least been a long- standing Risk Manager across BFSI domains and multiple geographies!
It’s almost an accepted axiom that a checklist of what not to do provides almost as much guidance or even more as probably as a checklist of how to do something! Remember how we all learnt and our survival mantras got imbedded in our early childhood and school-going days with our parents (especially Mom’s and Granny’s) and then the preschool teacher’s exertion to. It’s more so in a domain where the success of the domain is also assessed in its ability to find stakeholder acceptance even when the business is going great.
So, let’s get to our list of what not to do in risk management—or, even better, how not to do risk management!
A jargon master at work!
The so-called specialists seem to have a special affinity for using jargon everywhere, both
in written and verbal communication. This probably is due to being in the domain all along and triggered by a subterranean need to impress! While there is nothing illogical about being that way, it’s avoidable because it facilitates neither better communication nor transparency.
And then, is not the essence of communication (among stakeholders) clarity?
A know-all is prowling around!
None likes a chance meeting, let alone a scheduled meeting with a know–all prowling around who might start dishing out distilled wisdom uninvited! And then he is supposed to find a common meeting point among stakeholders so that all come around to the same view.
A dictator on the sly!
Risk Management is all about gaining stakeholder confidence, taking them on board and taking on a path of both bottoms up and top-down approach. While a Top-down approach could be the preferred approach in most internal control functions with advanced maturity levels, a more nuanced approach combining both top-down and bottom-up approaches always scores better!
Transparency may seem like a burden in our eagerness to act fast, but it really is about being transparent with those who are to be trusted, ones that you are to work with, the primary and maybe the secondary stake holders. So it doesn’t take long for stakeholders to detect one working on the sly and then get avoided like a hot potato!
In this backdrop, two characteristics, operating like a dictator and then slyness of doing things, combine to a concoction that reeks of one-upmanship, lack of trust and transparency! And makes the risk management function work out of a silo!
A showstopper all the way…..
After all, it is all about doing business and doing it well! That applies to both business functions and internal control functions. That is what the owners, board, and senior management strive to achieve. The core business of any organisation is to do business and add to the top and bottom lines. And do it in a strategic, acceptable, aligned way, leaving uncertainties to the minimum. That’s where risk management comes in!
So, when risk management becomes a showstopper or is perceived as a showstopper, it loses its all-important acceptability quotient. Without acceptability, all internal control functions amount to almost nothing.
So, the eager beaver showstopper as a risk manager is a simple no-no!
Also Read | The Evolving Role of Internal Auditors (IA) in NBFC Risk Management
A kindred soul with dripping tears!
Most humans have an almost irresistible urge to be do-gooders. And no doubt everyone is looking for someone who has a ready shoulder to offer or at least a helping hand to offer when they need it!
And then, it’s so easy to swim with the tide.
But then the Risk Manager is supposed to be of a different mettle. He is supposed to provide a peep into the deep, dark future and warn you lest you slip into a calamitous crevice or even a precipice ending in a deep gorge. And no institution likes to fall into a deep hole—ever or rather never!
Views expressed by Ashutosh Mishra, a risk management thought leader who has certifications from PRMIA and IRM and has worked as CRO of Bank, an Insurance
company and now as Chief Risk Manager with NABARD (National Bank for Agriculture and Rural Developement).
