During the last couple of years so many CEOs and other Board level Directors talk about risk management in such an enthusiastic way. It seems that among the large Greek enterprises risk management has become one of the trendiest topics of the C-suite.
Nowadays the annual reports of the large Greek companies all include a chapter on risk management. “Managing risks is a way of being more proactive and increases our ability to adapt effectively to a changing business environment”, says one, and “Managing risks and opportunities is a fundamentally important part of our Group’s long-term sustainability” argues the other.
Have risk considerations become all of a sudden critical to decision making? Is this interest truthful or is it just an illusion?
We have carefully studied annual reports of Greek companies that we could get hold of. Amazingly there is not even one with a sign of a wolf in it. Is it possible this to be due to the fact that the cold, hard facts could make their stakeholders nervous?
Looking deeper into various companies we found signs that consistent risk management work is conspicuously absent.
There was hardly evidence of a desire to identify, evaluate and mitigate risk, just superficial attempts to pretend it was being addressed. Talking to many top executives they tell us that they do not wish to talk about “normal” risks as they, having such a long experience, would have foreseen these.
Others argue that it is not the risk itself that threatens their organization but the market’s perception of their risk exposure. Can it be that risk management is down to egos at the top?
We talk about risk health checks, risk culture, top-down and bottom-up approaches but how important can all these be when the focus is only on the positive aspects of strategy?
Only by identifying, understanding and recognizing failure can failure be avoided in the future. If the uncertainty that threatens the achievement of corporate objectives is not highlighted, then progress will only be in the reports. Risk management can only be effective by acknowledging risk and by being honest about it.
Best practice organizations have risk-aware leaders, who actively champion the process and communicate the importance of risk management.
Best practice organizations have leaders that care. Do you really care about your risks ?