The Nation Newspaper

Tag: risk management

  • Wapic leads talk on risk management to boost productivity in ICT, Telecom

    Wapic Insurance Plc has enlightened clients and other stakeholders on the alternative methods of managing risk and Telecoms & ICT companies’ exposures, especially within a volatile economic environment like Nigeria.

    Its Managing Director, Adeyinka Adekoya in her remarks at a Seminar Series organised by the firm with the theme: “Mitigating Risk in the Telecoms & ICT Industry: Challenges & Solutions”, said the firm aims to ensure that its clients and potential clients in the ICT and telecommunications industry manage their risks effectively and efficiently towards greater productivity and value creation. She said risk is constant in life and all business endeavours, noting that it is the reason risk management is an important aspect in the businesses’ life cycle.

    She stressed that in a progressively globalising world, risk management is in fact, a measure that calls for constant remodeling and fine tuning to fit evolutions in business and the world in general.

    She said: “Globalisation has allowed for the proliferation of digital solutions, Telecoms and ICT. Technological and industrial advancement pose a risk to our collective future. To secure a progressive future, it is important that all technological investments of today remain sustainable and scalable for the future.

    “Insurance is one very important risk management measure. However, there are many other  valid measures that together with insurance will provide the right fortification for Telecoms and ICT companies in Nigeria. There are also many more ways that insurance can provide fortification for this industry than the ways in which we currently do.

     

     

  • Govt, firms urged to adopt risk management

    The Managing Director of Intergrated Cash Management Services Limited, Leon Jacobs, has called on government and companies to embrace a robust   risk management strategy.

    Jacobs, who stated this in a paper he  delivered at this year’s Risk Management Conference and Awards  in Lagos, titled, ‘Risk Management and Changing Global Paradigms,’ said this was imperative given the challenging environment we now live in.

    “We are living in a challenging new reality for governments and companies of all sizes around the world. There are many emerging influences that are creating opportunity, but at the same time, creating risks that need to be managed. As the risk landscape for commerce evolves, businesses can no longer rely solely on traditional risk mitigation or risk transfer tactics. They must take a cross-functional approach to risk management and explore different ways to cope with these new complexities.”

    He  listed such risks to include cybercrime, business interuption, damage to reputation, regulatory and legislative changes, economic slowdown, political risks and uncertainties.

    Jacobs said we are living in a challenging new reality for governments and companies of all sizes around the world, stating that there are many emerging influences that are creating opportunities, which at the same time, create risks that need to be managed.

    Speaking on how government and companies can prepare themselves for the risk and opportunities inherent in these changes, he said continuous professional education in risk management should be made readily available for risk managers in Nigeria.

    He said: “We are a nation that is constantly exposed to a myriad of risks, which are becoming very sophisticated by the day. This will equally require sophisticated risk mitigation efforts. Given these complexities within a nation already plagued by lack of talent, the importance of a robust risk management discipline to enable sustainable business growth has never been more critical.

    People cannot manage what they do not know. For those who know, continuous professional education in risk management should be made readily available for risk managers in Nigeria.

    “The Center for Risk Management Development (CRMD), which is the educational arm of RIMSON, should pioneer the development of a corporate risk modeling tool to help corporates and even governments better understand the potential impact of extreme events such  as natural catastrophes, disease outbreaks and political unrest.

    “It is hoped that CRMD will take on this challenge and produce the first indigenous risk modeling solution for Nigeria, which should make it possible to identify which extreme and catastrophic events are most relevant for a given organisation in terms of impact and likelihood, which would assist management in risk mitigation decisions and provide a more quantitative approach to risk disclosure.”

  • NAICOM seeks effective risk management

    The National Insurance Commission (NAICOM) has urged insurance regulators across Africa to put in place effective risk management structure in place by ensuring a proper assessment of the risk involved when new products are introduced by the insurance operators.

    Commissioner for Insurance, Mohammed Kari, in his opening remarks at the Risk Frontiers West Africa organised by Commercial Risk Africa with theme Changing the risk landscape, said the challenges of effective risk management include lack of adequate study by regulators before setting the frameworks.

    According to him, regulators in most developing economies have jumped on the band-wagon of risk regulation unprepared.

    He said rules and guidelines in most cases were copied from other jurisdictions with few similarities.

    He also highlighted lack of adequate internal expertise to lead the approach as a challenge, adding that the regulators did not obtain the appropriate expertise internally to drive the implementation

    He said the release of rules and guidelines with resultant penalties have created some distrust in the markets, adding that regulators are seen as too authoritative while regulators see the operators too as not serious.

    To this end, Kari said tools available for measuring risk must be expanded and tested over time to ensure that they are in conformity with the country’s environment since different countries have different levels of risk.

    He said: “It is obvious that risk is definitely changing the various sectors at a fast pace and it is our duty to find different avenues to mitigate the identified risk. Policymakers, most especially from the public sector, must ensure that there are laid down processes and guidelines for strengthening risk management so as to prevent any unfavorable circumstances such as the global financial crisis of 2007 and 2008.

    “In addition, they must also ensure that there is a good monetary and fiscal policy in place for the economy to thrive and maintain a stable inflation rate. Government should also ensure that the policies are implemented and not just on paper.

    “On the other side of the divide, the private sector and regulatory agencies must continue to collaborate to develop an effective and efficient risk management framework. They must work together to break the traditional mistrust that has existed between them. Fora have to be created for constant interaction that would create this desired trust.”

    The Commissioner commended the organisers  for taking the initiative at a time changes and challenges are going on across the globe.

    He said in changing the risk landscape, it is imperative that risk management and compliance level be discussed because the ability to manage risk is fundamental to growth and development.

     

     

     

     

  • How risk management can support executive implementation

    Risk can be defined as uncertain event that may occur or not occur during a project and it can either have a positive or negative effect. If the outcome of a risk is positive then it is an opportunity but if it is negative then it is a threat. Therefore, not all risks are bad. In fact risks with likely positive outcome should be magnified to increase the chances of it occurrence while risk with a likely negative result should be eliminated if possible or mitigate the impact of the risk should it happened by applying appropriate risk response plan. Generally, risk may make or mar project outcomes thereby making risk management an indispensable part of project management. Risk management is therefore crucial in determining projects success especially in an increasingly unruly and highly volatile economy like Nigeria where government policies are most vulnerable to change influenced by the whims and caprices of policy makers sponsored by greedy merchants both in government and outside government. It is imperative then for companies to protect their investment, reduce threats, build competitive and remain relevant through a robust risk management. However, cost of risk management makes companies feel that they can scrape by with the bare minimum. Until a crisis rears its ugly head, the value of risk management might be latent not visible to executives who are only keen on quick fixes that expose the project portfolio to dangers instead of building an enduring risk management process that will ensure projects deliver on objectives as stipulated in the project charter.

    Regardless of the size and complexity of a project, project managers must be aware of-and prepared for-dangers both small and large. When companies do not understand the risk scenarios their entire project portfolio is left exposed to failure eroding trust and confidence in both project managers and future projects to deliver on strategic business objectives.  Risk management is what helps both project managers and business executives identify the potential crisis that will cause project to fall apart or opportunities that executives are oblivious of that will enhance the success of the project and secondly, risk management will also help to look for alternative plan to either eliminate or exploit the risks identified.  Without effective risk management, the difference between what you plan to achieve and what you actually achieve is often significantly different. To be sure, project managers and their team members must assess the risks inherent in a project and adjust forecasts, tasks and processes accordingly. But risk management at the project level isn’t enough. The most effective risk-management processes go beyond individual projects and take root at the portfolio (group of related projects) level. Only by examining the inter-related relationships between projects and business strategic objectives can opportunities and threats gauged accurately and accessed on the strength of their merits.

    Using risk management best practices prevents future project problems and helps companies focus on what is really important, which results in better use of resources and efficiency.  According to a research by Ernst and Young, 96 percent of global executives believe their risk management could be improved and almost half of those respondents felt that investing in stronger risk-management practices would help them achieve greater competitive advantage. Therefore, there is no doubting the true value of proper risk management. The ever changing business landscape is yet another reason why companies must conduct extensive risk management process buttress by a recent survey.  According to the survey, more than 63 percent of executives interviewed for the Report on the Current State of Enterprise Risk Oversight-2nd Edition reported that the number and complexity of risks their organizations face has changed extensively or a great deal in the last five years.

    •Oluwatosin, a project management

     facilitator wrote in from Lagos