Risk - What does it mean for the progressive HR function?
13 September 2017
Over the past few years, the scope and scale of risks to which organisations are exposed have proliferated e.g. cybersecurity, data threats, terrorism, reputation – and these risks can be both outside and inside the organisation. Unsurprisingly, the level at which they are discussed and governed has escalated accordingly. Risk has also been incorporated explicitly into The UK Corporate Governance Code (2014), which sets out responsibilities for risk management and internal controls. The guidance is not only about ‘hard’ factors, but also includes specific reference to culture and assurance – including embedding risk considerations into reward systems.
Airmic, the association for those responsible for risk management and / or insurance in organisations, has published two highly relevant research papers. In 2011, in conjunction with Cass Business School, ‘Roads to Ruin’ highlighted 7 key common reasons that underpinned all but one of 18 company failures – lack of Board skill and NED control; Board risk blindness; leadership failures; poor communications; organisational and risk complexity; inappropriate incentives; and risk management ‘glass ceiling’. In 2014, with Cranfield, ‘Roads to Resilience’ described the themes that led to success – exceptional risk radar; flexible and diverse resources and assets; strong relationships and networks; rapid response capability; and constant review and adaptation.
Most of the themes that underpin both failure and success, therefore, are firmly issues for the Board and HR – but to what extent are HR truly involved in the risk business? Shouldn’t they be ‘joined at the hip’ with the Chief Risk Officer in approaching how to protect and progress the future of the business?
This meeting will explore contemporary and emerging issues of risk, with real-world case studies of what this can mean for HR. It will be complemented by a short research report.