 Written by Lindiwe Magobholi, IRMSA Member
Enterprise risk management is in its nature intended to manage risks of an organisation holistically. It is a reality that for many years enterprise risk management has struggled, with some organisations still battling to keep its seat at the roundtable, because although it is not a profit centre function it sometimes behaves as one. It is seen as a value add as opposed to being a contributor to the bottom line. Risk managers have been putting policies in place to ensure that organisations are resilient whilst achieving their strategic objectives. Simply put, optimising risk for reward. Scenarios are developed in order to set risk appetites to safeguard the business from any known event. The most difficult questions any risk professional faces when managing risk appetite is:
By nature, people are optimistic – rightly so. But it is our job as risk managers to be pessimistic and think of the “out of the ordinary” or “black swan” or "outliers" situations and manage the business against these risks whilst harnessing the opportunities therein. The objective is to ask,
As we were enjoying the new year, COVID-19 had started to wreak havoc in other parts of the world, and I wonder if we as risk professionals, were already paying attention to the pandemic and what conversations we were having in our emerging risks discussion with oversight committees. Did we imagine this wave ever reaching our shores? Certainly, the COVID-19 wave hit the shores of the Republic and President Ramaphosa declared a nationwide halt on all economic activities. As Professionals, we had to act on our feet whilst hiding in our homes with our children in fear of our lives and as the proverb goes “the rest is history”. Like Joseph`s dream in the good book of life the 7-years of famine are here and therefore Joseph’s emergency plan/fund must be activated, and like anything in life, the emergency plan goes through gruesome tests. As the media reports highlighted recently, it is very clear that many businesses are not resilient enough to survive the pandemic. As businesses were mandated to close in an endeavour to prevent the spread of the virus and only essential services were permitted to continue to provide much-needed services, we witnessed most businesses:
The South African Television News channels ENCA and Newzroom Africa ran a story on the 10th June 2020, indicating that business confidence fell to its lowest in 45 years, with all economic indicators signalling a crisis. The South African government introduced a Relief Fund to provide relief to those that are hugely impacted by the pandemic, the SARB relaxed its liquidity requirements and the financial services sector pledged to assist the economy with debt-relief measures including credit life cover, and yet all these measures are proving not to be enough. According to Statistics South Africa, by the end of 2019 the country was already in a technical recession. The pandemic is unprecedented and no one could have foreseen its impact but consequently, it was very evident the one month of “no trade” was catastrophic for most organisations or those that had reserves for less than a month to survive. It begs the questions:
Everyone at the roundtable should always consider the impact of a business failure on the most vulnerable citizens of this country – because that is a picture of a country that cares about its people. This pandemic has reminded us that in life, winter will always come, and we must be prepared for it. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/
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 Authored by: Dr. Les Carlo, IRMSA Risk Intelligence Committee Advisor
The advent of COVID-19 in South Africa has changed the landscape of risks irrevocably. It has brought home the importance of managing COVID-19 as a complex problem. From a risk perspective, it must shift focus onto a system of complicated or complex risks and opportunities. In looking once again at the 2020 IRMSA Risk Report it is clear that there is guidance on how to approach complicated and complex risks, but is it enough? Does the narrative “Navigating Complexity: The Frontier of Risk Management” tell us enough? The comparison between Complicated Systems and Complex Systems is detailed and powerful in helping to understand what is being dealt with when analysing problems. Given that a risk is in fact a problem that has yet to materialise, it can be usefully applied when adding one extra dimension. That is that in the case of a complicated risk, it must still be properly defined to avoid the potential to solve it incorrectly. This also applies to complex risks except that the “multiple non-linearly connected parts” or at least one of them must be subjected to an adequate definition if the system and hence the risk is to be positively influenced. The concept of defining the complicated risk is within the grasp of all of us. Having said that the risk report brings home the importance of understanding systems theory as a key tool in hands of a modern day risk practitioner or manager. But understanding systems theory alone, which is important, this does not help with addressing complex risks, and hence the relevance of the “Cynefin Sensemaking Framework”. Does the “Cynefin Sensemaking Framework” as described therein do to help the risk practitioner or risk manager in the important role that they must play now? It does in terms of differentiating a complex risk, and in helps in what to See, Attend To and Act Upon when faced with one. But does it help with how to address a complex risk in a way that will result in improved management of it? It is suggested two concepts need to be added to enable effective management. Firstly at least one or more of the “multiple linearly connected parts” of the system exposed to the risk need to be sufficiently defined to the extent that they can be positively influenced towards a better outcome. Secondly, once there is improved definition, an approach that will deliver an improved outcome needs to be selected and applied. In 1994 R. L. Ackoff in a paper on Systems Thinking and Thinking Systems suggested the following way of treating messy (or complex) problems.
They have defined that physical contact is one facet of the complex problem, and have effected a temporary change to the environment. In other words they have applied the lockdown regulations and in doing so influenced but not solved the problem. In conclusion, it is important for risk practitioners and risk managers to at least understand the basics of Systems Theory, something that IRMSA can include in its training programmes. Also, to address risks we need to do a very basic thing and that is to properly define the complicated risk or that part of the complex system that is to be treated. Finally, in the case of a complex risk, chose the approach towards treating it that fits the organisation to which it is exposed and possibly use one of the ways stipulated by Ackoff. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/ How risk management can be implemented effectively to disable corruption within organisations8/6/2020  Written by Mpho Modisane, IRMSA Risk Intelligence Committee Member
As professionals we should avoid falling prey to corruption. Corruption robs both the public and private sector to the extent of eroding our individual professional brand and that of our companies (reputational risk), it undermines the employees of both sectors who are truthfully and impartially committed to their professions. Corruption is defined as any conduct or behaviour in relation to persons in private or public sector entrusted with responsibilities in their office, which contradicts their duties, and which is aimed at obtaining undue benefits of any kind for themselves. Although most companies and government departments have clearly articulated policies that condemn fraud, bribery, extortion, misappropriation, favouritism, kickbacks and other forms of corruption, these policies don’t seem to be working as intended hence corruption keeps rearing its head. Corruption inhibits possible foreign investment, stifles economic growth, and undermines efforts towards achievement of sustainable development. It further undermines the various layers of controls created by companies, member organisations such as IRMSA, legal and judicial systems. Corrupt individuals and businesses who pay bribes to avoid complying to set rules, laws and regulations continue to benefit unduly by securing tenders, contracts, and favours at the expense of those who choose to uphold high ethical values. Many have lost their lives while fighting corruption and people’s lives continue to be threatened where there seems to be pushback. This renders the fight against corruption a more complex one. Most concerning to risk professionals is that corruption leads to other possible related and unrelated risks materialising. For example, if a private sector service provider pays kickbacks to a government department employee in order to secure a tender to provide a particular service, the service provider may not be able to deliver the service at the required standard or in extreme cases, not deliver the service at all. If the government department was intending to address a particular risk by putting in place controls with this service, it means the risk will highly likely materialise as a result of controls not being applied. David Lewis, the Executive Director of Corruption Watch, explains that one of the lessons we have learnt from our country’s recent past is the role played by private-sector companies and professions in facilitating public and private-sector corruption. These include members of the legal and auditing professions, tax advisers and management consultants, and real estate agents. Lewis further explains that the work of their organisation as a corruption watchdog going forward will focus increasingly on these identified facilitators of corruption. To make the risk of corruption prominent in our organisations we need tocreate scenarios in our risk discussions which demonstrate instances whereby corruption risks can materialise. The jargon used in the scenarios has to be relevant and at the most, be specific to the organisation. Where controls don’t work as intended, alternative or a combination of controls should be applied to deal with weaknesses. For example, to treat collusion, staff rotation can be used and supplemented with automation of certain processes. Corruption undermines the efforts of professionals in the private and public sector who live up to their mandate, and as risk professionals we need to protect the controls created through member organisations, watchdog agencies and legal and judicial systems. Risk management can be a useful tool to ensure that these controls are adhered to and where they are inadequate, risk managers must ensure that additional measures are put in place. One of the benefits of risk management is that when it’s done intelligently, it can contribute immensely towards the eradication of fraud and corruption, create sustainable value as well as protect and enhance reputation. In these unprecedented times, the risk manager’s role in the fight to corruption is more important than ever and as a risk professional you need to ask yourself the following questions about your organisation. Have you:
ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  When selected companies returned to business on 1 June 2020, they should already have had risk assessments and plans in place in accordance with the requirements for Level 3 lockdown.
They must also conduct worker education on COVID-19 and protection measures. Yet, at a recent briefing, the Department of Employment and Labour reported that, of those businesses it had inspected, 40 percent of private enterprises and 50 percent of SOEs were not compliant with the regulations. “Businesses need to go even further than these basic conditions if they want to mitigate the many risks they now face,” says Christopher Palm, Chief Risk Advisor at the Institute of Risk Management South Africa (IRMSA). He suggests several critical areas they must address on an ongoing basis. Revisit their vision, mission and strategic objects Even before opening, businesses should have reviewed their business model and adapted their strategic approach. They have to understand what about their business no longer works and what they must to do as each lockdown level becomes a reality. Perform a business impact analysis Just the OHS requirements can be onerous for businesses to implement, maintain and enforce as care is required for each and every location and duty. Organisations should carry out a business impact analysis that reveals the true cost of operating in that context. They may find they cannot resume business simply because it would be unprofitable to do so. Attend to immediate challenges Above all, companies must focus on cash management and liquidity first. Everything else a company does must be subordinated to this one objective. Assess normal business risks The biggest risk for companies is the impact of OHS requirements on their ability to operate. However, they cannot overlook typical business risks. They must quickly assess their current competitive advantages and disadvantages, especially in terms of their supply chain. If they cannot procure goods or services, they cannot continue. Create opportunities Having identified their competitive advantages, with a view to generating cash and building liquidity, companies will be ready for some tough decisions. They need to develop new ways of delivering their good and services to their market. Can they embrace ecommerce and home deliveries? Or should they sell their inventories off to atypical customers, rent out floor space, or hire out their expertise. In short, they will need to break the business mould and look for radical opportunities outside the norm. Assess legal commitments and exposures As the legal health and safety officer of their company, could the CEO be sued for murder if an employee dies because they did not implement the necessary precautions? A hairdresser in PE faces this situation after testing positive yet ignoring instructions to self-isolated, leading to the death of another. Companies must review their exposure to similar litigation, as well as their ability to comply with regulations both structurally and operationally. “Companies should accept that, when they open their doors again, they may need to be very different businesses than before to survive,” says Palm. They must therefore urgently reassess their strategic outcomes in light of new risks and opportunities, and pivot accordingly. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  Written by Dr Arthur Linke, Member of the IRMSA Risk Intelligence Committee
The renowned World Economic Forum’s (WEF) 2020 Risk Report featured all of the Top-5 global risks as being climate-related risks. These included: Extreme Weather, Climate Action Failure, Natural Disasters, Biodiversity Loss and Human-Made Environmental Disasters. In this time of a pandemic crisis, we must reiterate the significance of climate risk, and that we need not look far to remember many acute examples of climate risks materialising. The wildfire disaster devastation on all continents except Antartica in the past several years comes to mind, with the Knysna Fires, South Africa’s single largest ever environmental disaster economically being a particular local case in point. Should an acute climate disaster strike in these pandemic times, the pressure on our human and economic resources would be compounded, and even more incomprehensible. That is another lesson of the WEF Risk Report – the interconnected nature of risks, as well as the fact that “big loss events” or “long tail events” as they are called are becoming more frequent, and more devastating. As an aside, the risk of pandemics also featured in the Top-10 high-impact risks in the WEF 2020 Risk Report. It has been in the report for years, highlighted in special focus sections, and in 2015 it was the second highest impact risk, based on the events of the time. Many may consider Covid-19 to be a Black Swan, but the WEF reports and other sources clearly indicate to us that the risk of pandemics has certainly been on the radar for a long time. We have had a number of “preview” experiences in the past years with SARS, MERS, Ebola etc. and thus this is a “known unknown”, sometimes referred to as a grey elephant or even a grey rhino, utilising an African wildlife motif. For those interested in déjà vu moments, the 1918 Spanish Flu pandemic is a precursor. John Barry’s classic book on this catastrophic scourge comes highly recommended, whereby 2020 is a 100-year pandemic flashback all over again, with one of the few differences this time around being the Internet. We would do well to remember that when rating, assessing or evaluating risks and planning scenarios, we should always consider the worst-case possible scenario of raw or untreated risk (imaginable or even unimaginable) as a starting point. The main lesson, however, to draw everyone’s attention back to, is that climate risk is a slow (but accelerating) creep, like the analogy of the frog in hot water that doesn’t notice the temperature headed to boiling point. Similar to Covid-19, many seem to have so divergent and fervent opinions of climate risks. While we may not be headed to immediate boiling, we are certainly raising the temperature of our planet and our carbon emissions in an unprecedented way. Just like we weren’t prepared enough for Covid-19 despite all the warning signs (some being more prepared than others), we are not sensing the gravity, not preparing enough as a collective for climate risk, and not increasing our resilience. The insurance sector is one of the first sectors that has had to react directly to climate risk – fight or flight. Another IRMSA Risk Chat featured Environmental Social and Governance (ESG) reporting and what it means, but basically there are three factors impacting the insurance sector with regards to climate risk, and two of them have to do with ESG. The more apparent risk is that insuring assets threatened by climate risks e.g. properties by fire, flooding etc. is becoming less predictable and not financially viable as “big loss events” or “long tail events” become more frequent and more severe. There is something called the Risk Protection Gap (RPG) which represents those assets that are not protected (primarily not insured) against risks which is growing, also in part as a result of assets becoming non-insurable due to climate risks, all this to the detriment of global society and often the most vulnerable (another catastrophic slow boil). Drawing attention back to the Knysna Fires that presented us with not only South Africa’s largest environmental disaster in terms of economic impact, but the several billions of Rands of damage were mostly insured. This motivated the insurance sector to promote risk treatment and risk resilience going forward to be able to cover similar assets - if these can ever be covered at all again in terms of rising premiums and limited/no insurance possibilities. In terms of ESG, both insuring and holding of “dirty assets” is no longer acceptable to clients, shareholders and other stakeholders. Besides lawsuits and reputational damage, the first clients have completely declined to contract insurers covering coal, oil and gas manufacturers, and the assets themselves, shares in US Dollars tens of trillions worth of companies, many of them “dirty”, may significantly reduce in value and become “stranded” over the coming years, for example, as we shift to renewable forms of energy. Renewables represent an excellent opportunity to increase resilience to climate risk. So, whilst there is some change, growing awareness of climate risk, industry disruptions and a shift to a low carbon economy, these are occurring at pace that is just too slow. Prof Bent Flyvbjerg of Oxford University in a recent posting reiterated that when it comes to the “tail end” of risk, the most unlikely events, we just don’t know the limit of possible outcomes. The Covid-19 pandemic has shown us this – almost unimaginable outcomes of a "known unknown". He went on to say that; “Many have rightly observed that Covid-19 may end up being a mere dress rehearsal for the biggest and most urgent tail risk we face today: climate change. If climate science is right – and there is no reason to think it is not – the law of regression to the tail will be particularly pertinent here. It tells us that massive loss of life and wealth will likely follow if climate change is not treated now, at speed, and at unprecedented scale, with no time to waste in each step involved.” In other words, if the unknown outcomes of a relatively known risk event like Covid-19 have been treated in the way they were globally and can have these devastating consequences as we are seeing today, imagine how these outcomes might be for climate risk scenarios that are unprecedented for our planet. The economic or wealth outcome referred to is important – financial planning and financial resilience is one of the biggest factors of overall resilience, that is why we save for a rainy day (or not). Looking for an upside, anecdotally, Covid-19 has been good for climate risk. People talk about the great weather we’ve been experiencing of late (coincidence?), satellite pollution maps of South Africa and most other countries clearing up, birds everywhere and dolphins swimming in the canals of Venice (fake news, sorry). Every risk has its opportunity, for example solving our energy needs now in a more sustainable and resilient way through renewables. Why build an expensive, vulnerable power plant, when a distributed power array will solve our needs? Do we really need to travel and choke our way through smog and peak hour traffic to every meeting? Hopefully we learn these lessons, but as risk managers, we must go further, take up the baton and imagine the unimaginable consequences in the big picture. Ultimately, the current crisis should elevate the strategic importance of the risk management function and the influence it has. We should take advantage of the opportunity this crisis offers - exploiting the valuable lessons learned from the Covid-19 pandemic and improving our resilience for the next crisis. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/ Applying the humble principles of environmental, Social and Governance during the covid-19 crisis11/5/2020  Written by: Dr Anushka Bogdanov, Risk Insights, IRMSA Corporate Member
The coronavirus is an unexpected and unplanned global catastrophe, and corporate South Africa has no choice but to step in and assist its employees, however difficult it may be. Already we are seeing some evidence of this and companies that are rolling up their sleeves are to be applauded. In these current uncharted waters, proactive governance and managing social aspects both from within and outside company offices are paramount, not only for sustainability but also for survival. In this respect we should remind ourselves of what Nelson Mandela said when it came to a society coalescing: "If you want the cooperation of humans around you, you must make them feel they are important and you do that by being genuine and humble." Right now, a little humility will go a long way. During any time of crisis companies need to re-focus on the important principles of ESG - Environmental, Social and Governance – which refers to the central factors in measuring the sustainability and societal impact of an investment in a company. This philosophy is now even more pronounced after Government’s declaration of a National Disaster and a weeks-long lockdown which makes the national executive primarily responsible for co-ordinating measures for the mitigation, prevention and recovery and rehabilitation from disaster. This in turn means companies have to be responsible for implementing many of these measures. It also means company leaders will find themselves working in a completely different and untested paradigm and will have to adapt quickly. They will have to ensure continuity management in the organisation, taking heed of the wellbeing of its employees at all times. Doing this correctly can only enhance the reputation of companies during this difficult time. Organisations can also use the Corona pandemic as an opportunity showcase their ability to adapt to real crisis management, practically demonstrating robust governance. Disclosure of proactive policies and processes by companies also provides an insight to how well the S (social) component of the ESG impact is being taken into account. The management of human resource policies and supply chain disruption provides insights to the G (governance) of the ESG of companies. This will provide investors and society with strong insights into companies that have a better chance in getting out of the crisis stronger and more productively if they are led by ethical leaders who have taken into account sustainable human capital – the S in ESG. Boards of directors and management also need to be fully aware of the Corona impact on the brand and strategic reputation of companies. The kind of support companies need to provide to their employees ultimately assists in flattening the curve of infection which will range from its supply chain management, work from home, resources and infrastructure, paid sick leave and taking the elderly and pregnant women into account. It’s also incumbent on corporate leadership to critically and constantly evaluate the dissemination of crucial information regarding the virus to assist employees in making informed decisions. By doing this companies are reflecting their investments in people but unlike other investments, the dividend will be reaped in creating sustainable competitive advantage and a loyal productive workforce. It also goes without saying that as part of its governance employers have a legal obligation to ensure a safe workplace. Now more than ever before a company’s work practices directly affect their ability to contain the virus and manage business disruptions in general. So critically ask yourself what key questions do you need to ask yourself right now:
MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  Authored by: Chandu Kashiram, IRMSA Risk Intelligence Committee Member
COVID-19 has confirmed what Dr Nicholas Crisp had warned us all in the run up to finalising the IRMSA 2020 Risk Report. He warned that the NHI cannot solve all of our Nation’s social ills. Each and every department across the social spectrum has to deliver if the NHI is to succeed. Assuming that all intentions and plans to install a “world class” NHI system in South Africa are successful, it will still not be enough. COVID-19 has placed the best NHI systems in the world under considerable strain. This is mainly due to the system not taking care of the poor and the indigent. According to a recent Daily Maverick article by Richard Poplak (27 March 2020), between 1.1m and 1.4m households fall under the informal settlement category in South Africa. This equates to between 2.9m to 3.6m people. Although the Government has reacted swiftly to put into place the 21 day lockdown, at a practical level the lack of housing, exacerbated by the sheer lack of basic necessities such as running water and ablution facilities, has made the lockdown impractical in poorer communities. Social distancing is nearly impossible to achieve where the disenfranchised live between four to six people in a little one to two square meter shack. Washing hands and staying germ free is a big ask when most people do not have running water and share toilets across many shacks. COVID-19 is putting the spotlight on lack of service delivery and has placed the entire Government into fix-it mode, at huge cost to the economy and the people of South Africa. So what is missing? COVID-19 is also one of those risk events that is a serious “wake-up call”, not just in our country but the world over. It is forcing each country to take a hard look at the following –
Preventative Measures Simple risk management principles require us to identify the risks, and put into place effective preventative and corrective risk mitigating actions. The Government has put an effective council that is putting plans together and working as a team to beat the COVID-19 virus. Labour and business are also part of taking corrective mitigating actions. One of the Ministers even mentioned that the process is unfolding into the development of a blueprint on how various parts of government, labour and business can work together in future to deal with any major challenge. My view is that they should not merely come together to face major challenges or disasters but continue to work together as a matter of course. COVID-19 should be used to understand and develop solutions for the following -
In conclusion, we are merely a few days into the 21 day lock down and already many gaps and missed opportunities of the last 25 years of our democracy have been starkly and unambiguously been revealed. The COVID-19 has ruthlessly placed the truth in front of us all and left no place to hide. Let us therefore use this opportunity to learn from the mistakes of the past and begin our journey to recreate a better South Africa for all of us. The preventative measures are not aimed at Government only. Business, Labour and all South Africans have to do their part to build a much more resilient South Africa. Whilst we contemplate how we will work differently in future, let us also acknowledge to good work government, labour and business has done so far to deal with COVID-19. Let us also acknowledge the frontline staff, the doctors, nurses, healthcare professionals and each and every person providing essential services during these extremely difficult times. To make sure that there sacrifices are not wasted, PLEASE STAY AT HOME! ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  Authored by: Gillian Le Cordeur, IRMSA CEO
As we navigate our way through this crisis, that not only South Africa but the entire World is dealing with, The Institute of Risk Management South Africa (IRMSA) Executive Committee has highlighted many risks and opportunities associated with the COVID-19 pandemic. It is of critical importance to acknowledge that this pandemic is no longer a risk (it is a risk which has materialised) but has become a cause to many other risks emerging on our country’s risk radar. Two of the most significant risks to have emerged from this pandemic were highlighted; the potential of social unrest and a likely increase in crime. Both these risks if left untreated, have the potential to result in riots, looting, damage to property and harm to people. Not forgetting (on the back of unemployment, the loss of income and poverty) hunger, starvation and desperation. After intense workshops and discussions with our Executive Committee and stakeholders, IRMSA realised that we need to quickly recommend a risk response strategy to support government and these individuals in ‘hot spot’ areas whom have been deeply affected by this lockdown as a result of the Covid-19 crisis. Over the last weekend, we watched with concern how citizens in the Alexandra Township responded to social distancing and the SANDF, and it was clear that whilst we are managing the health risk, we will need to address individuals’ access to food. It is clear that this desperate need for food and basic necessities will be widespread in all townships and informal settlements. IRMSA feels that this is an opportunity for professionals and business leaders to personally play a significant role in managing this risk which will have an impact not only on all organisations but on every single household and citizen in South Africa. After extensive research and engagement with various parties, we made contact with an organisation called FoodForward SA and we will collaborate with this organisation to treat the core of these emerging risks – food distribution to those in need and for those who suddenly are unable to earn a living. Not only is this the right thing to do but an essential risk treatment strategy to address the consequences of social unrest, starvation, desperation and a potential for harm to, or the loss of life. FoodForward SA redistributes edible donated food products and operates as part of the international Global Foodbank Network (GFN). The organisation has an established national distribution footprint enabled by its verified beneficiary network of over 670 charities and over 255 000 people across the country. They already provide 20 million meals per year – but in the next few days to come and then 4 – 6 months, the need is much more. www.foodforwardsa.org While organisations that previously invested in developing robust enterprise-wide risk management processes are still experiencing significant impacts from this unfolding crisis, hopefully their leadership teams will align with IRMSA and take up this opportunity to be more proactive and participate in this drive with IRMSA and Food Forward SA. It is also an opportunity for professionals and leaders to personally to play a significant role in managing this risk which will have an impact not only on all organisations but on every single household and citizen in South Africa. In order to be part of the solution to this immediate risk and support those in need, please click on the link to make a donation. (Click here to make a donation) President Ramaphosa wisely stated that ‘united we are stronger’, and therefore we are proud to announce that in the spirit of collaboration the Institute of Directors South Africa, the Compliance Institute of Southern Africa, the Ethics Institute, Association of Certified Fraud Examiners SA, Financial Planning Institute of South Africa and the Actuarial Association of South Africa will be joining this initiative in order for us to have a larger impact and help more people in need. We are most grateful to these professional bodies for their support. IRMSA continues to play a leading role in South Africa and with our theme for 2020, #Risk Activism: Leading the journey to a risk intelligent future, we feel we will most certainly be doing so again with this initiative. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  Civil unrest and a likely increase in crime are brewing if South Africa does not solve the food security problems already emerging, says the Institute of Risk Management South Africa (IRMSA).
The IRMSA COVID-19 Risk Think Tank highlighted these risks based on risk data modelling and taking into account the unique disparities of South Africa. “It is not meant to spread panic or trigger political narratives,” warns IRMSA CEO Gillian le Cordeur. “It is merely what risk managers do; they use all the information available to predict with as much accuracy as possible future scenarios and recommend solutions to treat the identified risks.” Both these risks – if left untreated – have the potential to result in riots, looting, damage to property and harm to people as hunger, starvation and desperation rise on the back of unemployment, loss of income and pre-existing poverty. “The potential for civil unrest is less about the availability of sufficient food and more about the distribution of the available food while adhering to the parameters of the lockdown,” explains Le Cordeur. “Even if the lockdown period is not extended, the impact of the initial 21 days is already predicted to have a major impact on food security for millions of South Africans over the next six months.” Formal supply chains are robust enough to satisfy the needs of urban areas but many rural areas rely on an informal distribution network that can now no longer operate. There might therefore come a time that even those that want to comply simply can’t because they don’t have money for or access to food and essential hygiene items. According to IRMSA the treatment of this risk is the immediate support of a network in South Africa that has an established national footprint, has a track record of trusted performance, and can scale as soon as funds are made available. This will ensure that a national effort – in support of Government’s immediate focus on preventing the spread of COVID-19 – is well coordinated to offer maximum assistance to vulnerable communities while minimising the duplication of efforts. “Once we identified this risk treatment we started the search for an organisation that satisfies this list of seemingly impossible criteria,” says Le Cordeur. “We were relieved to find FoodForward SA; a food redistribution non-profit organisation that has been perfecting their operations since 2003.” FoodForward SA redistributes edible surplus food products and operates as part of the international Global Foodbank Network (GFN). The organisation has an established national distribution footprint enabled by its verified beneficiary network of over 670 charities that serve over 255 000 people daily across the country. “We have obtained a permit to operate as an essential service during the lockdown period,” says Andy du Plessis, Managing Director of FoodForward SA. “Our beneficiaries usually receive food and non-food groceries from us on a monthly basis; but we’ve already seen this frequency increase to every two weeks.” “At the moment the lockdown only allows us to prioritise facilities like shelters, aged care facilities, the disabled, and other at-risk individuals who require much-needed food relief.” “To add currently underserved provinces and rural communities to our efforts we need just over R50 million as an immediate calculation,” says Du Plessis. “For the sake of transparency and accountability this calculation is available on https://foodforwardsa.org/.” While the major retailers in SA are already part of the FoodForward SA network, Du Plessis says that SA producers of food items and manufacturers of essential non-food items now need to show South Africans that they care enough to donate products for the next four to six months. Regular audits by independent as well as partner-appointed providers ensure that the FoodForward SA warehouse storage facilities, supply and cold chain operations, logistics management and transport operations adhere to the strictest of food safety standards. Before the COVID-19 crisis FoodForward SA had a strategic plan to establish its operations in Limpopo, Mpumalanga and the Northern Cape, as well as strengthen its operations in remote rural areas through FoodForward SA Mobile Rural Depots. The lockdown creates an urgent and immediate need for funds to bring these plans forward as quickly as possible. “We are ready to serve South Africa as best we can,” says Du Plessis, “but we can only scale up if the projected R50 million can reach us within the next week, and sustained support over the next six months until the threat of civil unrest subsides.” “In short, we need more food and we need more funds … and we need it NOW.” CONTRIBUTION OPPORTUNITIES TO KEEP SOUTH AFRICA SAFE:
EDITORS NOTE: IRMSA has reviewed the necessary legal and financial documentation to verify the legitimacy of the intent and operations of Food Forward SA. IRMSA has no stake or share in FoodForward SA or any of its partners and/or beneficiaries. The intent of IRMSA is to proactively highlight to South African individuals, corporates and public sector the potential risk of civil unrest and the recommended treatment of that risk. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa/  Authored by; Walter Ehrlich, IRMSA Risk Intelligence Committee Member
COVID-19 is a numbers game and only a strategic response can alter the numbers. That is true for the country and for your organisation. If your only focus regarding COVID-19 is to look at operational crisis management you need to rethink your approach. The war against COVID-19 must be fought by understanding the numbers and responding to them strategically. If your organisation does not yet have an infection, based on probability, it is only a matter of time before your first employee is infected with COVID-19. How you respond to that event operationally is important. However, how you respond to the day-to-day growth in the transmission rate, that will inevitably follow, is of greater strategic importance. This is the battlefield on which your organisation will win or lose the war against COVID-19. Your organisation must establish upfront trigger points and actions that will come into effect immediately upon the trigger point (a pre-set number) being reached. At that stage hours will become critical and you certainly won’t have the luxury of time to deliberate and write long motivations to leadership. Exponential Growth The phrase is familiar to us but do we recognise what it means? As risk managers we must understand what exponential growth is, where it comes from, what it implies, and when it stops? Only then can we advise our organisations on how to respond to COVID-19 strategically. Trust me, I am neither a scientist nor a mathematician but I have made a point of gaining a layman’s understanding of the topic which I want to share with you. The following resources are useful to gain an understanding on the topic of exponential growth: The essentials you need to know are that:
We need to make difficult decisions to make a positive contribution to bring the national, and in time your own, inflection point forward, even if it impacts on your business objectives. There is no question that there are downsides to implementing certain strategies and every organisation, public and private, is grappling to strike a balance between fighting COVID-19, protecting employees, and running an effective organisation. We cannot expect government to solve the problem on its own. Every organisation, public or private, including your organisation must take strategic action to slow down the risk of transmission. ENDS MEDIA CONTACT: Rosa-Mari, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za For more information on IRMSA please visit: Website: https://www.irmsa.org.za/ Twitter: https://twitter.com/IRMSAInsight Facebook: https://www.facebook.com/IRMSAInsight/?ref=hl LinkedIn: LinkedIn: https://www.linkedin.com/company/irmsa-institute-of-risk-management-sa// |
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