COVID-19 Reaffirms the Need For Risk Management Specialists
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No business is exempt from crisis—whether facing outside forces such as the current pandemic or situations of an organization’s own making. Yet, businesses are often assessed by their responses to such incidents from customers, investors, the public, and others. Companies across the world are facing issues right from business continuity, managing human resources remotely and adapting to different business models. This is the time when crisis and risk management education is of vital significance, where creating an overall risk-ready culture will help in better managing the dynamic external environment, help in taking requisite steps, and even plan judiciously for the future.
While this first global pandemic in over 100 years poses mammoth challenges for businesses and society at large, it presents opportunities for risk management professionals in organizations. The world has become more complex and connected, and the rate of change faster, as trends and fundamental breaks continue to reshape many industries. In the past, risk management was overlooked and not considered relevant enough to have a position within the firm, as its perceived value and contribution was not realized. Due to COVID-19, many organizations are reconsidering this stance and are relying on their risk managers to guide the organization through this crisis. Risk managers have come to the fore with an opportunity to reveal their worth. Just like many other changes caused by COVID-19, it is to be anticipated that risk management will become an essential part of an organization’s core going forward.
Risk management in the new normal
The current pandemic demonstrates that now is the time for risk management professionals to add more value to the organization. The pandemic has led to an awareness that risk management professionals must move closer towards the analysis of strategic, and disruptive risks. Risk professionals must not only focus on monitoring 'enterprise resilience' towards the crisis but also on looking forward to achieving the business goals in the 'new normal'.
Risk management is no longer recognized as a check-the-box activity, it is now an indispensable and fundamental part of strategic and business decision making. It has become an add-on to the transformation agenda, an essential approach and integral part of the business to constantly monitor and drive the achievement of organizational goals.
The effect on risk management after COVID-19
The pandemic has created perceivable demand for risk management professionals. Until COVID-19, many risk management executives/professionals were concentrating on compliance-related risks. Now, the circumstances have changed, and professionals also need to be able to discuss and understand more external and strategic risks. They need the resources to act as a strategic business partner for both senior management and other stakeholders within organizations. As COVID-19 has revealed—large external risks cannot be avoided. Organizations cannot overlook a crisis like coronavirus that may happen in the future. Risk managers need to be acquainted with various crisis management scenarios to respond appropriately and efficiently to the crisis. It is all about limiting exposure and recovering from a crisis in a timely manner to add to the business resilience of the organization.
With the intervention of technology, the risk management function has gained immensely. Today, there are tools available that can help with risk modelling, plot varied scenarios, and flag potential concern areas within the organization and operating environment at large.
The business environment is constantly changing and to stay relevant, risk professionals must reimagine their role in the organization. It is also useful to assess the organization’s capability to remain resilient in times of crisis by managing risk and continuous monitoring.
While COVID-19 presents a lot of uncertainty and challenges for businesses, there may never be a better time for a risk manager/risk officer to present risk management as an essential part of running a business than today.