In October 2017 Federation of European Risk Management Associations held its 10th FERMA forum, a special event designed by risk managers for risk managers. FERMA is an association which includes 22 risk management associations all over the Europe and neighbor countries. The purposes of the forum are to invite professionals from different industries: financial institutions, manufacturers, consultants and representatives of a public authorities, share best risk management practices, discuss common pressing questions and implement networking connection. From my personal point of view, those aims where achieved and I will explain why.
The forum lasted 3 days and each day had a special theme, which in general created forum’s structure: “Leadership, Education, Communication”.
I don’t want to concentrate this report on organizational part of FERMA’s forum, but I have to mention that the whole process was carefully considered and formed. There was a special solution from moderators for every issue I’ve faced during the forum, regarding specific and general questions.
It was important and very elegant feature to use AttendeeHub app for the event. There were plenty of useful elements witch I had used quiet often: forum’s schedule, information about the speakers, the map of Grimaldi Forum and exhibitors information. However the most significant feature is a workshop page, where it was possible to participate in live polls. I have attended two workshops, where this element was used: “True power of a risk manager: influence or support” and “Big data: reality, the risks and risk management”, both moderated by Nosova Nadia. It was very demonstrational to monitor the answers of risk managers in real time on the relevant questions. As far as I can judge not all the participants were fully involved in using the mobile app. Anyways, I believe that majority of participants evaluated the app and found it useful. I even tried to use it after the forum to find out some additional information about the speakers.
Speakers are people, who made the forum amazing and definitely memorable occasion, especially when we mention the first and the last ones. I do not know, whose idea was to invite Mark Gallagher to open the first day with the theme about leadership and Jamie Shea for final keynote speech, but it was a move worth a chess play.
I have come to several significant conclusions since a very beginning of the forum. Mark’s speech was concentrated mainly of Formula 1 races, and after several opening remarks the audience got involved into his speech simply because it was very passionate. And that is the point – becoming the leader means feeling passion about your sphere, your industry and the job you do even if it is not racing sport. Mark gave us wonderful examples of how risk oriented approach works in Formula one and we learned that even an absence of ambulance helicopter can be the reason for cancellation the race. Another important topic, raised by the speaker was about corporate memory. Formula one races used to be a dangerous sport, dangerous for participants and audience. Industry has lost many talented young drivers and this is what should be remembered according to Mark. Now Formula one races are perceived by audience as a boring show, however I believe it is the achievement of risk oriented approach in Formula. Only after deep mistakes analysis an enterprise may pretend to sustainability and stable economic growth.
Secret ingredient for becoming a risk leader.
Workshop was dedicated on quit general topic, however I have received significant insights. The most interesting idea was presented by Martin Vilsoe - competitive advantage not at advantage any more. That was the central topic in his speech and argumentation was quite reasonable. Nowadays everything becomes faster and faster, traditional methods of risk management may become unpalatable for modern reality. According to Martin Heat Map is already dead. It takes too much time for a risk manager to identify the risk, evaluate and include it into the report. Market situation induces better risky decisions. As an example Martin divides risk management into 3 generations. First generation was focused on insurance with the main financial and hazard risks. Such approach was widely spread in 1990s. Second generation was focused on reporting. There were plenty of standards published and integrated into business processes like COSO, SOX etc. Era of preparing big reports with Heat maps and other diagrams is dead according to Martin’s message. Nowadays enterprises need better business decisions. Risk management should be more integrated in business, more focused on empowering people and include strategic aspect. That is what now represents significant value for a company. That is the key idea promoted by Martin and I am fully agree with this point of view.
Pauline Davoust was not so categorical. Her report was mainly about thinking out of the box. Successful risk manager implementing leadership strategy always tries to go above expectations. He has an ability to transfer, understand the role of other functions and their financial impact to the company’s performance. It is important to explain other functions that requests from risk manager is not a formal task but important part of their job. Linking risk management to numbers, financial indicators is also a type of exercise which is included in leadership exercise. Every day is a challenge for a company and risk manager is a person who understands it. Such understanding can be received only after leaving desks for the fields. And in the final Pauline mentioned the importance of education and additional certification, which is never unnecessary.
Nataliya Todorova also mentioned studies as a leader choice. She gave us several examples of her personal experience in getting certificates and how it influenced her day to day job. She also pointed out the role of national association – it is very useful to be involved in seminars learn new things and meet new people.
Actually, workshop provides key principals for a young professional to develop carrier and improve expertise in risk management.
Cyber risks challenges and governance
First, I must mention that at the beginning of the workshop there were useful brochures distributed to the audience, consisting of several technical aspects of dealing with cyber risks. It was also a big pleasure to listen to the panelists: Reischel Benno, Coessens Sabine and Peter Hacker whose second name was perceived as a guarantee of solid information.
In the beginning of the workshop we were presented with a piece of statistics, which was essential for understanding how serious the threat of cyber attack is. Almost 60% of risk managers are proactive for the cyber risk. Only 5% buy of all respondents buy insurance, and 35% coordinates between functions in companies. Imagine that 92% percent of risk managers reports that their companies were attacked by cyber criminals and half of them are worried about another attack. 54% of examined risk managers drive decisions against cyber attacks at a c-suit level. 20% of risk mangers do not work with IT department at all. According to global Lloyds report the total damage from cyber attacks is close to 33 billion dollars.
This numbers are astonishing, especially if realize the tendency of digitalizing corporate information and wide spreading of cloud drives. A very interesting idea was presented by Peter – practice of fake cyber attacks. Thanks this exercise Board would understand how important it is to build a system against such dangers. Sabine gave us a very interesting case about serious attack which her company suffered and a conclusion they came to afterword. Every company should have a huge cyber risk policy with a lot of definitions. However, a policy is not a universal solution, moreover understand the risk landscape and connect such policy with industrial specific.
Unfortunately, nobody raised a question that nowadays risk manager should deepen the knowledge in IT sphere. Of course, it is extremely important to cooperate with IT departments but the only way to make such cooperation effective is to speak the same language with technical specialist. In order to be competitive in labor market, deliver results in uncertainty and add value to the company risk manager should understand the technical aspects of cyber risks and be an agent between head if IT and the Board. That is my deep belief. Jo Willaert says we are on crossroads and perhaps this is the way how our professional arsenal should change?
A wonderful closing of event was, of course, Jamie Shea speech. Seems that Jamie was the only one, who suited for the role of a person speaking about serious things in a very relaxed and optimistic manner. The world is changing rapidly and the information background is changing even more rapidly. The last day of FERMA forum was devoted to communication and Jamie raised several important topics that should be taken into account for a risk manager. Every company is a subject of information stream. We face different geopolitical news from a variety of sources of information. It is risk manager’s part to understand the reason of and possible effect on enterprise, learn and adapt to unstable environment.
Overall it is difficult to overestimate the impact from the forum attendance. It was a great opportunity to take a closer look at the professional risk managers community, find motivation for being a part of this community. The highly topical conference program provides maximum opportunities for interaction and 4-day continuous networking between different participants. During the plenaries I felt lack of industry background and professional experience, but these only increased the value of every inside got from the workshops. Another important point is that we found a sense of belonging when we met with other members of our community, shared knowledge and took part in informal events.
It was a big honor and pleasure to be a part of such accomplished event and I definitely will not lose an opportunity to attend FERMA events in the future.
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