In the words of Warren Buffet “ Risk comes from not knowing what we are doing…”
The world today is a dynamic place to be in. Each day comes with its challenges and hurdles thereby exponentially increasing the risks that individuals, corporations, and economies have to face.
The past year and a half are evident of persistent and disruptive volatilities and risks. It can be said with absolute certainty that these volatilities and risks are bound to rise in the times to come.
We are today living under extraordinary circumstances surrounded by risks ranging from a data security risk to climate change risk to political risks and the list can go on and on.
No individual or organization can correctly predict and foresee the future but organizations can be and should be Risk Ready at all times.
Organizations need to move forward at a rapid pace to deal with the constantly evolving risks, for this to happen there is a need to set up risk management divisions that lead the organizations rather than just being a part of the back office.
Enough can not be said about the importance of being risk-ready and the benefits that organizations can yield by investing in building a risk management mechanism in today’s world.
Some of the benefits of being risk ready are:-
- Primarily being risk-ready would help organizations and economies to prevent unprecedented financial damages. Having contingency plans like business continuity plans would help organizations and economies to be up and running in the shortest time possible after any kind of disaster.
- In the current scenario, the population at large is fearful as to what is going to happen next and whether they will be able to come out of it or not. A top-down culture of risk management and being risk-ready in organizations and the economy as a whole will help people focus on the current growth opportunities instead of being skeptical of the future.
- Being risk-ready enables leaders to have access to a better quality of data which results in more informed discussion making and ultimately yielding better results.
- The success of any organization is directly proportional to how effective is the risk being tackled at an organization level.
It can not be reiterated enough that in the world that we live today success, growth, and reputation of any organization is dependently solely on the fact how well it manages its risk.
Being Risk ready might not help organizations spot the next big black swan event but it sure will help them simulate a better and well-equipped response.
The trend of organizations being risk aware and risk ready has changed in the past decade. A survey conducted by KPMG India revealed that about 80% of the corporations in India have a separate board-level risk committee and about 72% of the corporations have a CRO.
Another surprising fact that surfaced from the survey was that 77% of the organizations have categorized investment in risk management as a strategic priority instead of mere regulatory compliance.
This truly shows that risk management is at the heart of the growth and success of any organization.
As we release the importance of risk management at the level of a corporation it is imperative to make the same projection on India as a whole.
The success of corporations is aligned with the success of countries as a whole.
So, It is very important for us to raise the question “ whether India is risk ready or not ?”
From the start of the Pandemic, India has faced various unsavory events like economic slowdown and fallout of the health infrastructure during the 2nd wave being the top two.
In order to overcome the aftermath of the first and second wave of the Pandemic, we have as a nation have to work on two fronts. The first being healing the existing wounds and the second is being ready for the future i.e. being risk ready. The economic packages and reliefs provided by the Government to the people would help the wound to heal.
But the bigger question is how are we planning to move ahead and be risk-ready.
With the nationwide vaccine campaigns and constant infusion of funds for the development of industry would help India secure its future by being risk-ready.
The world has drastically changed in past few years. Growth is no longer a singular concept, rather it is multi-facet with the risk being in the center.
With the world becoming a social village corporations and economies can not function oblivious of the changes across the globe. Risk management and risk professionals are often perceived as harbingers of resistance, but it is high time that we understand that risk management is actually the stimulus of growth and success and that being risk-ready is the need of the hour.
To conclude on a millennium tone “ being risk ready is the new cool thing to do”
Reference
- https://assets.kpmg/content/dam/kpmg/in/pdf/2017/03/Emerging-trends-in-risk-management.pdf
- https://www.forbes.com/sites/steveculp/2020/10/01/why-risk-management-is-more-important-than-ever/?sh=4b51d8c630b6
Submitted By: Vasundhara, Member of Student Risk Club (SRC)
