Source : The Times, Malta
Author: John O’Dea
Risk management in the private sector is about protecting yourself, your business or project and your employees against the probability of uncertain future events
Mr O’dea is a founding member of the board of the Malta Association of Risk Management, president of Public Risk Management Organisation (PRIMO) Malta and secretary general of PRIMO Europe
Good risk management implies control of possible future events and is proactive rather than reactive.At the risk of sounding irreverent and profane, without a shadow of a doubt Noah wrote the first textbook about risk management. Admittedly he had good connections and prior warning, but despite the fact that there was not a cloud in the sky and www. weather. com forecast good weather he followed professional advice, took heed of Murphy’s Law, did a risk assessment and built the ark, thus ensuring the continuity of the species.
Risk management is the process of identifying, analysing and responding to risk factors throughout the life of a venture and in the best interests of its objectives. Good risk management implies control of possible future events and is proactive rather than reactive. Good risk management will reduce not only the likelihood of an event occurring, but also the magnitude of its impact. It ensures business continuity.
Risk management in the private sector is about protecting yourself, your business or project and your employees against the probability of uncertain future events. Risk management in the public sector is about protecting the public against those risks that may affect any part of society and for which government is expected to respond, including pandemics, economic or financial crisis or natural disasters and the performance of those companies and organisations that provide the basic public services.
Traditionally, private and public enterprise in Malta have relied on insurance as the main source of risk management, comfortable in the belief that once they do what the insurance companies require them to do, and pay the premiums, the risk is totally covered. In this sense businesses have yet to learn how to take more responsibility in protecting the business against future negative events. This latter aspect is often financially motivated as executive management fail to see justification in going beyond the insurance stipulations. It is as if the overriding perception dictates that insurance is the be- alland- end- all of risk management strategies. Clearly this attitude is unsustainable in today’s business and operational environments.
The Malta Association of Risk Management (MARM) was formed with the intention of establishing itself as the principal risk management body in the Maltese islands with an emphasis on raising awareness of the need for good risk management practice and reaching out to all sectors that potentially stand to benefit from the discipline. MARM seeks to present risk management as a complementary approach to mainstream management, which takes into account the potentially negative as well as positive outcomes of decision making.
Business managers at all levels must not expect risk management to solve bad management, nor will it make up for inadequate resources and poor decision making. Risk Management can, however, reduce the likelihood and consequences of events that might affect organisations from time to time. Most importantly, good risk management is also about identifying opportunities in risk and this is a very powerful idea in today’s interconnected world.
MARM will be formally launched during a half- day conference to be held at the Dolmen Hotel, Qawra on March 30. Jorge Luzzi, president of FERMA (Federation of European Risk Management Associations) and group risk management director for Pirelli worldwide, executive director of Pirelli Insurance and Reinsurance Company in Dublin and managing director of Pirelli Group Reinsurance in Switzerland will be the keynote speaker.
The guest speakers will be Jack Kruf, president of PRIMO Europe, principal consultant with Acestes and former city manager of Roosendaal; Marie Gemma Dequae, scientific advisor to FERMA and a past president of the federation, who was recently appointed by the Belgian government as an independent director of Dexia Bank Belgium and its subsidiary Dexia Insurance Belgium; Carolyn Williams, head of thought leadership with the Institute of Risk Management (IRM); and Guy Kurjian, president of the World Food Safety Organisation (WFSO).
Entrance to the conference, which starts at 9 a. m., is free. Seating is limited to 60 participants and registration is required.