Raphael John-Lall

Busi­ness and gov­ern­ment lead­ers must utilise risk man­age­ment prin­ci­ples when con­fronting the chal­lenges of the con­tem­po­rary world such as lack of forex, the need to di­ver­si­fy the econ­o­my or the geopo­lit­i­cal ten­sions be­tween Venezuela and T&T.

This is the view of CEO of the T&T Risk Man­age­ment In­sti­tute (TTR­MI) and founder of the Caribbean Risk Man­age­ment Acad­e­my (CR­MA), Ken Hack­shaw, who will host a risk man­age­ment con­fer­ence at the Radis­son Ho­tel on Sep­tem­ber 25.

In an in­ter­view with the Sun­day Busi­ness Guardian, Hack­shaw ex­plained how risk man­age­ment prin­ci­ples can as­sist busi­ness lead­ers.

“I have done work in the last 12 months with two fi­nan­cial in­sti­tu­tions, cred­it unions, and an en­er­gy com­pa­ny in the Caribbean.

“How can an in­sti­tu­tion, be it a mom and pop store or a large busi­ness con­glom­er­ate or a lo­cal man­u­fac­tur­ing firm en­sure that they can thrive in their busi­ness? How does a busi­ness in­crease sales by ten per cent?

“What is pre­vent­ing the busi­ness per­son from achiev­ing this ob­jec­tive? Is it the peo­ple or the sys­tems the busi­ness has? Risk man­age­ment is im­por­tant in iden­ti­fy­ing what can go wrong.”

He then used an ex­am­ple of the forex cri­sis that the lo­cal busi­ness com­mu­ni­ty faces.

“This does not take away from the forex is­sue. The busi­ness own­ers have no con­trol over that. They must ac­cept that risk. If a busi­ness can­not get the US dol­lars to pur­chase their goods, what are their oth­er op­tions?

“What oth­er op­por­tu­ni­ties are there to di­ver­si­fy? Giv­en the strength of the busi­ness, what oth­er types of busi­ness ven­tures can they get in­to?

“So, risk and strat­e­gy are in­ter­lock­ing. It mat­ters not the in­dus­try you are in. Risk man­age­ment al­lows you to make bet­ter de­ci­sions. It gives you da­ta and in­for­ma­tion so you can make bet­ter risk-in­formed de­ci­sions.”

The one-day CR­MA 7th an­nu­al hy­brid En­ter­prise Risk Man­age­ment (ERM) con­fer­ence will be themed “Re­fin­ing Risk and Re­silience: Nav­i­gat­ing Com­plex­i­ties to build a Fu­ture-Ready Caribbean En­ter­prise.”

Some of the lo­cal and in­ter­na­tion­al speak­ers in­clude the At­tor­ney Gen­er­al John Je­re­mie, Min­is­ter of Plan­ning Kennedy Swarats­ingh, econ­o­mist Sen­a­tor Dr Mar­lene Attz, Dr Apanisile Temi­tope Samuel from Nige­ria among oth­er speak­ers.

Par­tic­i­pants can take part vir­tu­al­ly or be there phys­i­cal­ly and they rep­re­sent dif­fer­ent in­dus­tries from fi­nance, in­sur­ance, man­u­fac­tur­ing and ed­u­ca­tion.

Hack­shaw de­fined en­ter­prise risk man­age­ment as sys­tem­at­ic or­gan­i­sa­tion-wide ap­proach to iden­ti­fy­ing, as­sess­ing, pri­ori­tis­ing and man­age­ment of risks that could im­pact strate­gic ob­jec­tives and over­all busi­ness suc­cess.

He said the theme of the con­fer­ence is be­ing dri­ven by what is hap­pen­ing in T&T, the Caribbean and glob­al­ly.

“The en­vi­ron­ment is be­com­ing so volatile and so chaot­ic at times, giv­en the geopo­lit­i­cal ten­sions, geo-eco­nom­ic risks, cli­mate change, the is­sues around the sus­tain­abil­i­ty and re­silience, hence the theme of the con­fer­ence.”

He point­ed out that the At­tor­ney Gen­er­al was in­vit­ed to speak as de­vel­op­ing leg­is­la­tion around En­ter­prise Risk Man­age­ment is im­por­tant.

“En­ter­prise risk man­age­ment, which is at the core of our con­fer­ence, has been leg­is­lat­ed in Ja­maica. It is the on­ly is­land that has leg­is­la­tion around ERM. So, I thought I would in­vite the At­tor­ney Gen­er­al to share thoughts as to where is T&T in this space.

“Is it on the leg­isla­tive agen­da? T&T’s Prime Min­is­ter on May 9 was quot­ed in a news­pa­per as say­ing the Gov­ern­ment will over­see the de­vel­op­ment of an au­dit plan to ce­ment prop­er risk man­age­ment and de­vel­op a com­pli­ance im­prove­ment plan and risk leg­is­la­tion. All of that falls un­der the um­brel­la of ERM.”

Pub­lic sec­tor

Hack­shaw spoke about how En­ter­prise Risk Man­age­ment can im­pact State in­sti­tu­tions and pub­licly man­aged com­pa­nies and the in­dus­tries that they op­er­ate in.

“All of these min­istries and agen­cies have ob­jec­tives they would like to ful­fil and ac­com­plish. But who there will be iden­ti­fy­ing the risks as­so­ci­at­ed with those ob­jec­tives?

“Who is iden­ti­fy­ing what can go wrong or what needs to go right to ful­fil these ob­jec­tives?

“Ei­ther the ob­jec­tives com­ing out of the man­i­festo of the UNC par­ty which is now in Gov­ern­ment or ob­jec­tives spe­cif­ic to the in­dus­try that the min­istry is op­er­at­ing in. It is about the strate­gies to be de­ployed and it needs to be part of the busi­ness ar­chi­tec­ture of any of these types of com­pa­nies.”

He added that at the Gov­ern­ment lev­el it is im­por­tant to in­cor­po­rate risk man­age­ment strate­gies to deal with the most re­cent geopo­lit­i­cal events.

“We are liv­ing in a com­plex world. There is eco­nom­ic, there is geopo­lit­i­cal. There is the is­sue with Venezuela, the Unit­ed States, Guyana and T&T now in­ter mixed. The de­ploy­ment of risk man­age­ment is not a nir­vana nor a sil­ver bul­let. Think of an air bag in your ve­hi­cle. It will not pre­vent an ac­ci­dent from hap­pen­ing but it will re­duce the im­pact when that ac­ci­dent oc­curs.”

He al­so not­ed that risk man­age­ment is al­so im­por­tant for the se­cu­ri­ty agen­cies and for the re­duc­tion of crime.

“For this sec­tor, there is some­thing called op­er­a­tional risk. This is de­fined as fol­lows, the pos­si­bil­i­ty of some­thing go­ing wrong be­cause of the fail­ure of peo­ple, process­es and sys­tems. It could be each of the min­istries or state agen­cies are go­ing out there, try­ing to ful­fil ob­jec­tives with­out iden­ti­fy­ing what could go wrong or the risks in­volved in the achieve­ments of those ob­jec­tives.

“Many of these folks be­lieve they know what the risks are. Hav­ing ex­pe­ri­ence in this field is not good enough. That by it­self could be a risk as there could be pro­fes­sion­als in the area of crime and se­cu­ri­ty man­age­ment who have not up­dat­ed their skills.”

He en­cour­aged cap­tains of in­dus­try and aca­d­e­mics to con­tin­ue to get train­ing in risk man­age­ment.

“One of the biggest chal­lenges with some of the lead­ers of in­dus­tries and in­sti­tu­tions is the fact they are not as in­tel­lec­tu­al­ly hum­ble as some of us would ex­pect. I would call it ‘risk hu­mil­i­ty.’

“Know­ing that you do not know every­thing so you bring in folks to ad­dress that. Econ­o­mist Dr Mar­lene Attz is some­one who has re­al in­tel­lec­tu­al hu­mil­i­ty as she ac­quired a cer­tifi­cate in Risk Man­age­ment.”

He con­clud­ed by say­ing that he wants to see the busi­ness com­mu­ni­ty, gov­ern­ment lead­ers and the so­ci­ety as a whole be­come more “risk in­tel­li­gent.”

“You may think that you have a cer­tain risk cov­ered but in two days it will morph in­to some­thing else. Look at what Ar­ti­fi­cial In­tel­li­gence is do­ing. We’ll al­so cov­er that at the con­fer­ence. If you are not us­ing AI, you will be left be­hind. When par­tic­i­pants leave this con­fer­ence, they will leave with some­thing in their toolk­its.”