What is the most important contribution risk management can make to the lives of people in organisations?
Practicing risk management has taught me to look at the big picture, understand the role of yours and others’ actions in that broader context, and the consequences they lead to.
It allows you to break silos, introduces a sense of discipline, proportionality and equity required to solve problems. If practiced correctly, it compels you to focus on identifying and addressing what may seem like competing or conflicting objectives or risks (e.g., public health protection versus economic revitalisation) and requires collaboration, trust, rational thinking and empathy.
Clearly, we have seen the need for all these attributes to be at play since the advent of the pandemic and our success will depend on how we apply them in a cohesive, integrated manner moving forward.
What is your current favourite book or podcast and why?
As a risk management professional, I was taught to always look at approaching and addressing problems or risks through the lens of causative reasoning.
Understanding cause and effect has been my mantra of practice and which I have always felt as being neglected by even the most knowledgeable especially in my line of work. Reading ‘The Book of Why’ by Judea Pearl provided an extreme sense of validation and reassurance. In a world exposed by the potential threat of irresponsible data scientists, he has described the dangers of ignoring causality in the proliferation of AI and other intrusive technologies.
“Correlation is not causation” is something that is taught early in all our educational lives but continues to be indiscriminately practiced especially in domains affecting peoples’ lives.
I have been advocating people in all decision making spheres to read this book as it provides a layman description of the importance of understanding and applying causal reasoning.
What action could a company take that would make a difference to successful recovery from the pandemic?
I will speak from the perspective of regulators who have a responsibility of protecting and ensuring peoples’ lives and livelihoods. I strongly believe that one of the causal factors for the advent and the consequences of the pandemic is a global regulatory failure to collaborate.
What Covid-19 has illustrated very clearly is the presence and manifestation of interconnected risks. Regulations are developed and administered to address these risks but rarely in a coordinated manner. Regulators establish these artificial barriers that may be jurisdictional or sectoral in a nature because they assume there is a starting and ending point for the regulations they administer.
However, risks don’t respect such barriers, are not linear and extremely complex. Unless there is a coordinated and a global effort to break the silos and address the interconnectedness of such risks, we are likely to see several such occurrences in the future.
Regulators have to learn to humbly accept their failures and limitations, prepare to compromise on their authority and work collaboratively, and focus on broader social outcomes (and not strictly on their artificially drawn mandates) even if they appear to be competing or conflicting in nature. Take the example of vaccine approvals. It makes no sense to me as to why we couldn’t have had a global approach to the regulatory review and approval process.