Risk, Innovation & Change

Martin van  Staveren finalized his dissertation about the “Design propositions for Implementing Risk Management in Organizations”.  His study is an in depth search for the mysteries of  human soul and the related behaviour.

He concludes that “Managing risk is difficult, applying risk management is more difficult and implementing risk management in organizations is the most difficult.

Risk management is about handling uncertainty, with which most people feel rather uncomfortable. Moreover, risk management has a preventive character. This means doing something to avoid something else happening. However, in most situations there is no direct relationship between the application and benefits of risk management. Otherwise, private and public organizations operating in our globalizing world are highly vulnerable to risk. Therefore, an increasing number of managers and executives acknowledge that the risk of not routinely applying risk management is unacceptable for their organizations, as well as for shareholders and other stakeholders.”

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International Survey of Corporate Responsibility Reporting 2008

Source: KPMG International

“In a world of ever changing challenges companies are shifting away from risk management approaches and toward an approach that has learning and innovation at its heart. Reporting is necessity if companies are to know and understand their social and environmental impacts, and how to minimize the dangers and maximize the opportunities associated with new and emerging challenges.”

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ISO 31000

The International Organization for Standardization (ISO) in Genève started in 2005 the development of a guidance standard on risk management. An ISO working group was established to develop a Committee Draft called ISO CD31000. The standard “gives generic guidelines for the principles and the adequate implementation of risk management. It is not intended to be used for the purposes of certification.”

The launch is expected soon. It “proofs” that risk management is mature. We think that ISO 31000 will be invaluable to ensure Enterprise Risk Management programs within all public entities. It will add value to all our organizations by helping with implementation of the latest and best global risk management practices. The standard is good but should of course be implemented. That will be an investment, but PRIMO believes will always pay off in the complexity of politics, government, management and society.

ISO 31000 is very similar in some respects to ISO 9000 and other broad based international standards. Though it will not be not certifiable. It is in our view a concise and comprehensive statement which can in practical sense contribute to the awareness and implementation of public risk management. PRIMO will follow the development on broader scale. Colleagues in The Netherlands are involved in the elaboration process. We welcome ISO 31000.

Risks on Climate Change: it gets worse

In Copenhagen Scientists and politicians are discussing this week during the “International Scientific Congress on Climate Change the “global risks, challenges and decisions on climate change”. All organized by the University of Copenhagen.

What are the risks we are facing and how do they impact us this century. Four leading experts brought forward that sea levels appear to be rising almost twice as rapidly as forecasted two years ago: 50 to 100 cm by 2100. If this is true we need to prepare ourselves. The conference in Copenhagen is a chance for science to awaken the politicians, which will meet by the end of this year on the Copenhagen 2009 Climate Conference. How to convince politicians, in fact they represent us, so how to convince ourselves, that it is getting worse and that the conference to come is important for the climate.

Risk management will start for politicians with taking the scientist very serious and trust there predictions. Otherwise new risks from nature and ecosystems will emerge and expand further and have impact on our cities, our people, our nature itself, our lives. It will have hugh impact on city management all along the worlds coastlines and area’s under sealevel.

The Greenland icesheet, Danmark, seems to play a keyrole here. Copenhagen therefor is the place to be.

G20-agenda: risk management

On the 14th of March, next week, the G20 countries are meeting in London to prepare for the global economic summit next month. What will be on the agenda? Financial regulators as tax, funds and bonusses. Of course. But the real focus will be on prevention and avoiding disasters. for the future.

Quite an ambition. It seems to be a first but firm reaction: “The G-20 now has a crucial role in driving forward work between advanced and emerging economies to tackle the international financial and economic crisis, restore worldwide financial stability, lead the international economic recovery and secure a sustainable future for all countries.”

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The Art of Risk Management

Amsterdam is midway through the construction project of the north-south metro line (photo © ANP). The 8-year project began in 2002 and is costing €1.7billion, double the figure projected in 1996! But there are hugh problems realizing it. Where the risks underestimated? The contracts not well designed? Council and alderman amateurs? The managers, planners and civil engineers inadequate or not in control ? Or was it the attitude of central government?

Former Minister Veerman will lead the commission which will investigate the course of this project, with one mission: to audit the quality of risk management. Finally! Recognition of risk management as a true profession and a crucial factor for proper project management and good public governance. Is risk management perhaps an art in reaching goals and targets within budget and on time?

The top 10 business risks for 2009

“What challenges are likely to affect your company in 2009 and beyond? The credit crunch aftershocks and the deepening global recession, rank as the most important business risks for 2009, displacing regulation and compliance from the top spot. Green initiatives, competition from new entrants, human capital issues, and reputational risk all rose in the new Ernst & Young report.

It identifies the top 10 global business risks

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