 South Africa has one of the highest unemployment rates in the world, with many being unable to provide for their families. This has been the motivation behind The Institute of Risk Management South Africa’s (IRMSA’s) drive to make a meaningful contribution to the fight against hunger and food scarcity.
The institute has indicated that it realised the risk that food insecurity poses to the South African business landscape and felt responsible to be part of the solution. Choosing a food champion On World Food Day earlier this month the impact of Covid-19 and the emerging risk of food scarcity were driven home more profoundly than ever before, says IRMSA. The institute, together with nine other organisations including the Institute of Directors South Africa (IoDSA), the Association of Certified Fraud Examiners South Africa (ACFESA), the Corporate Counsel Association of South Africa (CCASA), the Compliance Institute of Southern Africa (CISA), and the Financial Planning Institute (FPI), have continued with their relationship with FoodForward SA as their champion to collect, store, preserve, package and distribute meals to the vulnerable during this time. Millions are food insecure Judging from the number of people that have become unemployed in the first and second quarters, FoodForward SA estimates that 30 million people are food insecure. This means they are not getting regular access to safe and nutritious food. “There are no easy fixes to the current threats posed by poverty, unemployment and structural inequality. Food is foundational for the rest of the country to work well,” says Andy Du Plessis, Managing Director at FoodForward SA. FoodForward SA is involved in recovering edible surplus food from the consumer goods supply chain and distributing it to registered community organisations that serve the poor. “I believe that our food banking model – recovering good quality edible surplus food from the supply chain is the most cost-effective way to address food insecurity.” Good supply chains Du Plessis warns that the country is in a food security crisis like never before. “It is not that South Africa does not have enough food. We do. However, the allocation and access of food is inequitable because of poverty dynamics.” He says SA has a net surplus of food, but most of it is lost or wasted because of weaknesses in the supply chain. FoodForward SA has since it was established in 2009 secured a sophisticated supply chain based on the collaboration of numerous partners. Distribution during Covid-19 During the previous financial year FoodForward SA distributed 5,115 tons of food which represents 20 million meals. In the past six months, directly because of the Covid-19 pandemic, the organisation has distributed 5,500 tons of food or the equivalent of 22 million meals. Du Plessis notes that they were operating in only six provinces before the coronavirus started spreading in SA. “We are now operating in all nine provinces as we make sure better access to food is realised,” he adds. Bedrock of food security The scourge of farm attacks and brutal murders has become a huge risk to food production in SA. “Farmers are the bedrock of our food security. If we disrupt this, the economic impact will be catastrophic.” Du Plessis says Zimbabwe is a prime example. “If we become a net importer of what we currently grow, food prices will skyrocket, and food insecurity will deepen severely,” he warns. ENDS MEDIA CONTACT: Idele Prinsloo, 082 573 9219, idele@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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 By: The Institute of Risk Management South Africa (IRMSA)
World Hunger Day sees many Corporate Social Responsibility (CSR) initiatives take flight. Teams of employees pack boxes full of non-perishable goods for hungry communities and share their good work on social media. Feeding programmes get an influx of help and social media is flooded with a stream of #volunteer selfies. Retailers place shopping trolleys for food donations at store entrances so that shoppers can #makeadifference. The ‘fight against hunger’ box is ticked for another year. What if, instead of seeing hunger as a ‘do-good’ activity, corporates saw decreasing global food security for what it is: the risk with impending probability and disastrous impact? What if, instead of being prompted by marketing teams to ‘do something for World Hunger Day’, top executives – and boards – of companies proactively created long term sustainable plans to address and eventually prevent the effect on hunger on the global economic climate? Children that are malnourished struggle to benefit from education, even if they have access to education. Top scoring candidates won’t be considered for job opportunities simply because they have a criminal record from that one time, they had to steal to feed an ailing family member. Entrepreneurs that can only afford to feed their family and not themselves struggle to ‘be the best they can be’ for national economic growth; hunger simply saps their energy. Community leaders can’t ‘engage productively’ about a new infrastructure project with their ears ringing from the hunger pleas of their constituents. There is so much money going around. Surely a portion of it can be invested to feed the next Patrice Motsepe, Magda Wierscka, Michael Jordaan … Cyril Ramaphosa? And surely those tasked with feeding our next generation of business and nation leaders should be kept to task when they mismanage those funds? The crisis of hunger seems to bring up more debate and questions, and not nearly enough solutions. When solutions are discussed it seems that the wheel keeps on being reinvented, but it never really gets rolling fast enough, or at all. Why does everyone want to go at it alone? Why not partner with those that are already experts in getting the right food to the right communities within a system that doesn’t fall victim to fraud and corruption? Earlier in 2020 when the COVID-19 pandemic wreaked havoc on food programmes IRMSA – Institute of Risk Management South Africa – identified the risks of civil unrest and an increase in crime related to food scarcity that might be triggered by the national lockdown. IRMSA also identified FoodForward SA as a company that has been around long enough, with a solid enough track record to significantly relieve the persistent hunger of vulnerable South Africans. In the words of Andy Du Plessis, Managing Director of FoodForward SA: “We use quality edible surplus food from the supply chain, so our model is sustainable and environmentally friendly. Because all the food is donated, it costs us only R0,85 to provide one meal. We also prioritise providing food to the most vulnerable groups - children, women and youth. And, since 75% of our beneficiary organisations focus on education, skills development, women and youth, our food is a catalyst for social change in under-served communities.” Since the start of lock down FoodForwardSA has been able to distribute 5,300 tons of food, amounting to 21 million meals, to vulnerable communities across the country. The organisation was able to achieve this through the support of donors that include a heartening number of big SA brands. While lockdown has been lifted for the most part, the hunger of vulnerable South Africans haven’t. And since hunger isn’t something you solve once, but something that comes around three times a day, the solution can’t rely on the dedication of a few. More funds need to reach the hands of organisations already set up to serve without lining their own pockets. Solving the hunger crisis isn’t easy, but it’s vital. Any company that wants to grow needs a stable economy and an eager workforce. Hunger threatens both. It’s time for big business to stop just ticking the ‘fight against hunger box’ and start truly solving the hunger 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/  Written by Mark Victor - IRMSA Risk Intelligence Committee Member
The current pandemic has helped organisations confirm the criticality of further digitising their business value chains, fuelled by the need to operate remotely and to provide greater access to the workforce to better enable the performance of their tasks. As a result, there is wide recognition that digitisation of business processes is set to increase significantly in the years to come, potentially at an exponential rate. The impact of this business transformation should not be ignored by risk practitioners, as it comes with significantly greater risks and opportunities, and business leaders need to fully understand the potential strategic choices to make in redirecting their strategy, whilst carefully managing the real risks introduced by a digital future. An excellent example of this has been the global impact of reliance on financial models and algorithms that have replaced many of the decisions that have traditionally been made by humans, which has contributed towards increased market volatility as a result of automated share trading, the global credit crunch as a result of flawed assumptions and the underestimation of the global systemic impact of these exposures, and increasing impact of robotics in everyday life, which is now broaching on the future of mobility. The fourth industrial revolution is driving exponential change, with the advent of new digital eco-systems, business and service models that are impacting the very core of what organisations do and the products and services they provide from the way they interface with their customers, manage and operate the enterprise, and even the future of work and the workforce. This is translating to new operating models, new products, new digital and technology strategies that need to be supported by evolving technology platforms, data and infrastructure. This requires a change in corporate culture, strong leadership direction and possibly even a reimagined corporate brand and focus. Whilst the governance and management of enterprise IT and risks has received more attention over the last decade, the current risk focus is inadequate to respond to the digital future we all are expected to face in our organisations and an approach that is strategic, focussed and proactive is essential in understanding the potential and uncertainties relating to this future. Risk considerations go beyond the identification and management of emerging technology and cyber risks, and need to extend to the careful assessment of strategic risks and opportunities, ethical and reputation risks, people and culture risks, legal and regulatory risks, and also execution risk. Key questions to consider include:
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/  By Gillian Le Cordeur, CEO of the Institute of Risk Management South Africa (IRMSA)
Even before COVID-19 reared its head, millions of South Africans went hungry every day. While efforts to feed these people have been long-established through organisations like FoodForward SA, the pandemic threatens to exasperate the problem like never before. With massive job losses already starting, and many more expected to come, even those never affected by hunger face the prospect of going without food, let alone proper nutrition. Yet, whether our lifestyles are significantly impacted or we are in that group that simply needs to tighten their belts, the fact is hunger affects us all as a nation. The humanitarian aspect of hunger cannot be ignored, but the indirect economic and societal consequences can literally bring a country to its knees. Humanitarian Studies have shown that hunger has many adverse effects on both children and adults. Undernourishment in mothers can result in birth defects. Children who go hungry will not only be sick more often but suffer from poor health and underdevelopment throughout their lives. In adults, lack of food also causes poor health. Unfortunately, if they cannot afford food, they are also unable to buy medicines that assist their recovery. So they face a persistent downward spiral of illness. Economic The Food and Agriculture Organization of the United Nations website states that the impact of malnutrition on the global economy, which includes obesity, is estimated at USD 3.5 trillion per year. At a national level, 4% to 5% of a country’s GDP can be depleted by hunger. Some of this loss can be accounted for by sick leave, but a substantial amount is attached to the support programmes needed to assist victims. Not only does hunger sap a nation’s motivation; it also diminishes its citizens’ likelihood of becoming more economically active. Malnourished children may not live up to their educational potential and adult aspirations are hampered by stress, depression and other psychological disorders. Societal In South Africa, we’re seeing the rise of protests and crime as starving communities become desperate for survival. It is at this level we as a nation are all equally affected. On the one hand, as looting and burglary increase, our personal security is put at risk. Of greater concern is political instability and the fracturing of national unity. Some economists believe that the Arab Spring was ignited purely by the price of bread. While many hoped the resulting protests would lead to democracy and prosperity, the reality was political instability and economic uncertainty. Right now, we need foreign investment from those who are basing their risk projections on local trends and the effectiveness of our government’s response to them. Or rather, our response as a nation. The above points don’t even begin to cover the devastation of hunger at all levels of existence. Food first That’s why, if there was ever a time for us to stand together and reach out a helping hand, it’s not only now but over the next several years as well. That said, relief efforts are not immune to corruption, as we have witnessed in South Africa’s own national programmes as well as those of other countries. The contemporary view is that hunger is a result of unsustainable food production practices in a world where growing populations challenge the scalability of established supply chains. More progressive thinkers rightly assert that the main problem is good governance. Strict control of funds and resources is paramount to successfully getting food into the mouths of those in need. So is the sensible management of the complex operations required to collect, store, preserve, package and distribute meals effectively. One can’t just drive a lorry of food parcels to the nearest community. There is a sophisticated supply chain at work based on the collaboration of numerous partners, each providing a specialised link that keeps the process alive. While experience and focus are essential factors in making this huge undertaking work, the secret ingredient is integrity. And integrity comes from singularity of purpose. Yes, governments certainly have the power to pull together massive resources, but execution should be entrusted to those who have demonstrated their dedication through a proven track record. No other political considerations should influence their performance. At IRMSA, we identified FoodForwardSA as this kind of champion and are putting our weight behind their cause. In the words of Andy Du Plessis, Managing Director of FoodForward SA: “We use quality edible surplus food from the supply chain, so our model is sustainable and environmentally friendly. Because all the food is donated, it costs us only R0,85 to provide one meal. We also prioritise providing food to the most vulnerable groups - children, women and youth. And, since 75% of our beneficiary organisations focus on education, skills development, women and youth, our food is a catalyst for social change in under-served communities.” This is an amazing drive with far-reaching humanitarian, economic and societal benefits from an organisation with decades of proven integrity in their work. FoodForward SA needs our donations now more than ever to meet the increased challenges presented by COVID-19. Because, in the spirit of ubuntu, when we feed our nation, we feed ourselves. 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: Mighty M Mhlanga, IRMSA CRMPRAC Member
“Never let a good crisis go to waste”, Rahm Emanuel said during the 2008 global financial crisis. This catchphrase has been reprised by many who remain optimistic despite the current challenges we find ourselves in. The current landscape presents one of the most perplexing and difficult environments for individuals, business leaders and to a large extent, governments who must provide leadership and guidance under extreme stress and criticism. There is no magic bullet for a pandemic that literally shut down many, if not all industries and destroyed all economies, but as gloomy a picture as this is, there is a positive transformative aspect to this pandemic. My focus is on how government should use the current crisis to address some of the threats and identify positives or exploit opportunities that will assist in addressing our country’s triple challenges of unemployment, poverty and inequality, challenges which have been further exposed and exacerbated by the pandemic. According to the National Treasury, the South African economy is set to shrink by 7.2%, 2% more than the very high global contraction of 5.2%. This represents the worst recession since World War II and is likely going to remain so for quite some time. The South African Reserve Bank (Reserve Bank) has for the past few months been playing a pivotal role from a monetary policy point of view by reducing the repo rate in an effort to induce spending and stimulate economic growth. As good as this is, it is not enough on its own. The Reserve Bank Governor, Lesetja Kganyago has for the longest time been emphasising that government needs to play its role by implementing structural reforms and using the fiscal policy to support interventions introduced by the Monetary Policy Committee. Despite progress in some areas, government has largely failed to implement reforms. Lungisa Fuzile, the former Director General and now CEO of Standard Bank in one of his interviews mentioned the missed opportunity by government to roll out the broadband spectrum prior to COVID19 which would have meant better broadband access and speed, low cost of communication and data prices leaving money in people’s pockets which in turn would have induced aggregate demand in the economy. This is but one of many examples. In May, government announced massive COVID19 economic relief measures to the value of R500 billion, this sourced from the reprioritisation of the current budget, local funding sources, as well as international financing institutions. This package was largely aimed at addressing the healthcare crisis, assisting the vulnerable unemployed, protecting and creating jobs and saving businesses heavily impacted by the crisis. As expected, many citizens were hugely encouraged by this and had the hope that we can defeat the pandemic together with government. Some, though, criticised the lending from international funding institutions highlighting the nation’s already high debt levels. From a point of view of crisis response, I believe the funding will be critical if used for purposes mentioned by the President and re-emphasized by the Finance Minister in his supplementary budget. Unfortunately, we find ourselves again falling short when it comes to execution. The daily reports and news on allegations of corruption, irregularities, maladministration, fruitless and wasteful expenditure, flouting of procurement procedures are negatively impacting government’s ability to effectively implement these economic relief measures and reforms. The public is getting more and more impatient with government’s slow or lack of initiative to address corruption. Corruption presents a major risk to our ability to respond to the pandemic and our economy’s recovery. The inability to use borrowed funds for purposes they were borrowed for also represents a huge risk for our country which can have a multitude of effects such bankruptcy, inability to service our national debt and incapacity to fund critical initiatives to address the tripartite challenges. The current trajectory suggests that the above risks are expected to materialise, unless of course we act with a great sense of urgency. The president’s response to the much-publicised allegations of corruption was to authorise the Special Investigative Unit (SIU) to probe all corruption linked to the R500 billion COVID19 relief funds and help recover looted funds. As positive an intervention this is, it is not sufficient as a risk response. We need to urgently invest in preventative measures that deter potential corruption and also implement consequence management to deal with the corrupt individuals. This will build the required confidence in our government and their ability to see the nation through the pandemic challenges. Government’s role has never been more important than it is in today’s climate. Business and citizens rely on decisions made by government to subsequently make their own decisions. Another high national risk is uncertainty and unpredictability of government decisions that can render assumptions, strategies, and recovery plans obsolete. Despite the aforementioned national risks there exists a myriad of opportunities that government can exploit to respond better to the current crisis and also place the country and its citizenry in a better position post COVID19. Hereunder are a few of the opportunities government should consider:
This time calls for us not only to hold government to account but to also bring forward solutions so that we can emerge out of this crisis a better nation. We can either destroy the future of our country or work together to weather the storm and deliver on the aspirations of our people. 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/  Only by building risk intelligent organisations will leaders be able to overcome six distinct global threats identified by the Institute of Risk Management South Africa (IRMSA). This is according to Christopher Palm, IRMSA’s Chief Risk Advisor.
“Leaders at the highest levels of the private and public sectors must embrace an enterprise-wide culture of integrated risk management to secure their future,” he says. The threats The first threat is the exponential growth of information. Organisations who fail to build a competitive advantage around harnessing their data will be left behind. The second is the drive to adopt new technologies. Failure to effectively implement digital transformation and 4IR technologies will leave organisations vulnerable to those who do. Third is the ability to develop innovative business models. If leaders cannot create new, agile and flexible business models delivering faster, excellent decision-making they will lose ground to rivals. Fourth is disruptive competition. Young upstart enterprises are shattering traditional business practices with completely different approaches to delivering value. The fifth is a next gen market that not only expects data- and technology-driven experiences but supports agile disruptors over rigid incumbents. In other words, one has to be the best in breaking down barriers to entry or access to one’s prodcuts and services. Sixth is a geopolitical landscape marked by COVID-19, climate change, trade wars, and other socio-economic upheavals. Palm says these six risk factors mean the pace of business is constantly accelerating in an increasingly complex global environment, resulting in greater uncertainty than ever before and demanding more, faster, excellent decision-making. Risk-intelligent leadership These conditions compel leaders to make the right decisions more often, much faster and using the best information available to them. If they falter, disruptors will quickly force them out of their own market. “IRMSA believes the frameworks and methodologies of risk management can help them immeasurably,” says Palm. This means that private and public sector leadership must start thinking about the future together, using hindsight and insight to create foresight. “That is not enough though, thinking and designing alternative futures or responses to potential risks and opportunities, in advance and based on futures thinking and scenario planning, will, in essence, give your organisation the basis of fast and reliable decision-making in concert with a flexible and agile business model,” states Palm. Organisations who do this successfully typically integrate their strategy, risk management and resilience playbooks to optimise decision-making. They also acknowledge that delegating ownership and accountability throughout the organisation is critical. To bring agility to their business model, they discard tall management hierarchies in favour of empowering people with the right skills to make business-critical decisions at point-of-contact resulting in a risk intelligent and resilient organisation. Most of all, they break down silo mentality, that is, where information-sharing, decision-making and action are confined to a specific department or area of responsibility. “Risk management is collaborative by nature and that’s why we believe it plays a strong role in the risk intelligent future,” says Palm. Lastly, resilient organisations strive to become data-centric and technology-savvy to achieve their ends. Becoming risk intelligent A risk intelligent future is founded on public and private sector leaders having foresight that enables them to make excellent decisions. “Risk management is not just about avoiding danger but about leveraging opportunities - helps organisations map a sustainable growth path forward,” says Palm. A risk intelligent future will be the theme of IRMSA’s upcoming virtual conference from 30 Sep -1 Oct 2020, followed by a Master Class on 2 September 2020. Speakers from organisations showcasing their thought leadership in becoming risk intelligent organisations, both in public and private sector ranging from multinational organisations to small and micro enterprise will be in attendance. 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 Pavana Ranjith IRMSA Executive Committee member
“The rate of change is so high everywhere these days that you now must assume that someone will disrupt you, and often from a direction you least expect. As Steve Forbes sees it “You have to disrupt yourself or others will do it for you.” – Extract from Exponential Organizations by Salim Ismail. The words “disruptive technology” invoke thoughts of uncontrolled chaos and uncertainty with many organisations viewing it explicitly from a negative impact to themselves and their related industry. This view is supported by a recently released study on the state of innovation in South Africa by Accenture, which indicates that even though the majority of South African companies are expecting to be disrupted by innovations in their industries over the next three years, half of them are not prepared to cope with it. Disruption creates opportunity. This is arguably best illustrated by those entrepreneurs and companies who have innovated out of the disruption created by the unprecedented and far-reaching consequences of the Covid-19 pandemic, by radically embracing or accelerating technological investments to remain relevant. The longer-term impacts will become prevalent through entrenching of the move to virtual workspaces and practices; digitization as a key platform for learning and skills development; accelerated autonomous health, manufacturing and transport industries; and far more integrated, diverse and coordinated supply chains to name a few. Do we as risk practitioners regard these as technological disruptions or technological innovations or both and how do we determine if our own organisations are equipped and informed to deal with the new normal? Risk Management has a responsibility to guide executives and decision-makers in understanding the risks and opportunities presented by disruptive technologies. Some of the key risks include the risk of being overtaken by competitors and new market entrants with cheaper and more efficient and effective business models, failure to meet the increased demands of clients, diminishing revenue channels and growth opportunities, inadequate talent pipeline, poorly-conceived responses to macro trends and changing consumer preferences. Some of the key features of innovative companies who disrupt and innovate include: Flexibility and adaptability: having the right technology with robust configuration or alternatively the practical strategies to move towards this. To illustrate this, some recent shorter term examples in the healthcare industry in response to Covid-19 include 3D printer technology used to produce airplane parts, now used to produce respiratory ventilators, drone technology to drop parcels and medication, and telemedicine with virtual visits and remote-patient monitoring. Data Analytics and Capabilities: coupled with flexibility and adaptability is having the right systems to efficiently obtain and analyse data to inform disruptions and innovations. Leadership and innovative culture: the above will not be successful without the innovative and delivery-driven leadership that understands that constant business change is part of the “way we do business”; a culture and organizational structure that supports, encourages and rewards innovation and creativity while supporting “quick fails” and a diversity of knowledge and skills to collaborate and implement robust solutions. We as risk practitioners are an integral part of this diverse workforce. Do we practice some of the key ways of understanding the risks and opportunities presented by disruptive technologies? The following are critical for the risk practitioner to consider helping broaden his/her understanding of these risks and opportunities:
The nature of our own jobs will evolve as technologies such as AI (artificial intelligence) will replace the mundane tasks of number crunching and report writing and free up time for deeper and more proactive value-adding risk work. Are we adaptable, flexible and appropriately skilled? Are we building the right data analytics now to ride the exponential headwinds of disruption and innovation? 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 Adv. Modidima Mannya, IRMSA Risk Chat Contributor
There cannot be any doubt that the coronavirus disease of 2019 (Covid –19) has redefined the world in general and the work environment in particular. In the work environment, the Compliance and Risk Officers probably have the most complex tasks of ensuring that businesses stay afloat. While the Finance Officers battle to manage budgets and make do with limited and constrained financial resources, the Human Resources Officers battle with the implications of having to retrench, the Strategy and Marketing Officers battle with business repositioning and more importantly; the Compliance and Risk Officers ought to be battling with the complex compliance and risk environment, which has since developed during this pandemic. Compliance and risk management is not necessarily taken seriously in many organisations. Most Compliance and Risk Officers are misunderstood, avoided andor even disliked. This is mainly because at the end of the day, they tend to ask pertinent questions and raise issues which determine the life and future of an organisation and its staff- issues that management don’t necessarily want to deal with, or merely just not ready to deal with. The changes brought about by Covid–19 complicates an already complex operating environment for Compliance and Risk Officers. The compliance requirements of Covid–19 has added to the pressures experienced by the Compliance and Risk Officers. Business continuity and operational survival of any organisation is now entirely dependent on the risk management’s capacity to effectively manage compliance and risks. The new normal has heightened the risk profile of every organisation and redefined company’s strategic risks. This means that the Compliance and Risk Officers must now adjust to discharging their responsibilities in a high-pressure environment. It is in moments like these when matters detrimental to the organisation, like corruption, mismanagement and various other acts can expose an organisation to serious high operational risks. Many organisations faced a sudden shutdown where even existing business continuity plans could not be implemented. Those who could have staff work from home were suddenly faced the additional cost of providing staff with work-from-home resources. In many instances, emergency procurement became the buzzword. Labour intensive and small businesses were forced into immediate and unplanned retrenchments. This is all evidence that risk management was not taken seriously, or has not worked as it should have. Compliance and Risk Officers have to work through these various controversies and complexities to define and ensure good governance in an abnormal situation. The first immediate challenge is whether leaders of organisations appreciate that every single decision must now be compliance and risk informed. Equally, Compliance and Risk Officers face the critical challenge of appreciating that they now work in wholly undefined environment which requires thinking on one’s feet. As government eases lockdown and businesses re-open and more social and economic activities take place, Compliance and Risk Officers need to be able to critically analyze the implications of any activity associated with their organisations for effective inputs. The normal approach to compliance and risk management is mitigation. In the current environment, risk prevention and immediate elimination is the new normal. As an example, infection control and prevention measures determine the future of any organisation. Compliance and Risk Officers are now required to do advisory and implementation work, as well as monitor the work (and processes) being carried out by the organisation. It is no longer enough to have a compliance and risk plan and expect the risk owners to implement. Compliance and Risk Officers are now part owners of compliance and risk issues. This is also partly because policies remain unchanged, and in many instances, they are no longer applicable. Furthermore, it is vital that decision making must be rapid and decisive, if a catastrophe is to be avoided. Malfeasance is generally an opportunity issue. Those entrusted with managing resources often take advantage of situations such as this. Heads of organisations are unlikely to cope unless they have a dedicated compliance and risk capability which enters the arena when necessary. As every decision depends on compliance and risk, decision making must incorporate the advice of Compliance and Risk Officers. The current situation is new to many if not all organisations and may not have precedent. That is however not a defence available to a Compliance and Risk Officer. Compliance and Risk Officers have always worked outside a defined framework. Whatever the policies, rules and plans, Compliance Officers and Risk Officers rely more on critical analysis skills than defined industry frameworks and practices. In the context of the current situation, it is Compliance and Risk Officers who can advise better how people can relate to each other in the workplace, who must be there and what must be in place It is the Compliance and Risk Officer who can tell better, who must be allowed to drive the truck or make tea. It is the Compliance and Risk Officer who can tell better which door of the building to use and how staff must behave whilst at home. It is the Compliance and Risk Officer who can tell whether the right quality of sanitizers should be procured. It is these basic things which determine whether an organisation can open its doors and remain operational. It is the Risk and Compliance Officers who can tell better whether it is worth retaining staff or spending money an organisation does not have. Therefore, Compliance and Risk Officers should assess whether:
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/ “Resilience is the key to enabling business growth in a hostile market environment,” says Christopher Palm, Chief Risk Advisor at the Institute of Risk Management South Africa (IRMSA).
In its most general human context, resilience is defined as “the ability to recover from or adjust easily to misfortune or change”. Expanding this basic definition then one will need to have the ability to anticipate, respond and adapt to, and/or rapidly recover from a disruptive event – in other words to “keep going” – it doesn’t have to be pretty or convincing it just has to have a preventative capacity as well as an adaptive capacity in response to the disruptions. In fact, those that achieve perfect resilience, that is, avoid interruptions altogether, are transformed by it. “Every time a business anticipates and counters all threats at its current level, and learns from it, it then empowers itself to operate at a higher level, thereby compounding its gains,” says Palm. With nothing holding it back, it can focus on and elevate its growth strategy. So how can organisations acquire resilience? What makes an organisation resilient? While the function of a business is to deliver goods or services to a market that needs them, its purpose is to grow. Sole proprietors and corporate shareholders alike invest their capital into a business hoping it produces a tidy return on investment. The more market share it can gain, the higher the returns. Yet, when adverse conditions in its internal, market or macro environments delay its progress, its growth trajectory veers ever further from its original projections. The sole proprietor loses faith.Corporate shareholders lose confidence. The business loses ground. It seems obvious that an organisation should understand its various environments and identify the threats and opportunities within each. It will then be able to respond to the risk, at the very least, develop the means to continue operating in spite of them, and, equally and maybe even more importantly to also leverage the opportunities identified. At best, its growth will not be disrupted at all. At worst, it will be able to recover operations rapidly with minimal impact to its progress. So, a business’s ability to anticipate and either avoid or counter setbacks and responding to opportunities with agility must be a core ingredient of its resilience. Resilience, therefore, is a direct product of integrating strategy development and execution, effective risk management, business continuity planning and excellent decision-making. Transformation However, according to Palm, resilience shouldn’t just be about being able to rapidly bounce back from disaster. Rather than a set of preventive and corrective steps, it should have a lasting impact on the organisation’s capabilities. “True resilience means a business has transcended the risks that threatened to prevent its growth and has transformed itself to achieve greater performance because of it,” he says. For an organisation to truly benefit from resilience, it should integrate what it has learned into its strategy. This means that resilience should be highly valued by its leadership and risk management must be deeply integrated into the strategy development process. Conclusion So, organisations that build up their resilience will be better able to protect their growth and be transformed by what they have learned. Since resilience is the direct product of risk management and business continuity planning, it follows they will reap the greatest benefit if risk management is a permanent component of their strategy and decision-making. “Businesses that want to grow without hindrance must realise that risk management and business continuity planning are no longer obligatory support functions. Rather, they are accelerators of business growth,” says Palm. 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 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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