Why you need the best risk management professionals
Risk affects every organisation, although the types of threats that your business faces will depend on various factors. For example, the markets within which you are active could expose your organisation to credit risk, liquidity risk, operational risk and more.
These issues are under the spotlight more than ever before in the aftermath of the global financial crisis, yet many businesses still struggle to accurately identify and counter risks effectively. Media reports of rogue traders show us that problems can occur even when comprehensive compliance processes and technologies are in place.
Ultimately, risk is a human issue, and businesses need people who are adept at tackling the threats they encounter. This is why finding the right risk management professionals is an essential piece of the puzzle when optimising corporate governance.
Sophie Spencer, principal consultant at Barclay Simpson, recently spoke to Business Reporter about why risk management is so important and how leaders can raise the bar at their organisations.
Size doesn’t matter
Risk management is essential for all businesses irrespective of size. Failures or breaches can still have a significant impact on multiple stakeholders even when your circle of influence is fairly small.
Nevertheless, risk managers at much larger organisations must consider systemic risk whereby serious problems within their company can start a chain reaction that can affect multiple businesses, entire sectors and even economies. Systemic risk was a notable factor in the collapse of Lehman Brothers immediately prior to the global financial crisis.
Shoring up your defences
Organisations can implement a multitude of measures to prevent risk, and new developments arise frequently in this area. The three lines of defence strategy and the Bank of England’s recovery and resolution planning requirements are key examples of recent industry innovations.
As the name suggests, the three lines of defence strategy ensures there are always three pairs of eyes managing risk. The first line deals with threats on an operational day-to-day basis and is overseen by the second line, often comprised of risk and compliance professionals, who report to senior management. The third line usually has an audit function and conducts independent reviews to evaluate the effectiveness of previous measures.
Meanwhile, recovery and resolution plans are proposals that banks must produce to show how they would prevent any adverse effects on other organisations if they themselves faced financial difficulties.
Hiring the right people
Clearly, businesses need well-trained and experienced professionals who are specialists in particular areas of risk management and take their responsibility to stay abreast of the latest regulations very seriously.
The cream of the risk management crop also possesses substantial stakeholder management skills and can forge strong relationships across organisations. Not only are the best risk managers personable and articulate but can also translate complex technical terms into a language everyone can understand.
How can Barclay Simpson help?
The risk management landscape is constantly evolving, with the introduction of new regulations every year. However, Barclay Simpson is a specialist risk and corporate governance recruitment firm that can help businesses navigate this challenging space.
Our combination of extensive industry knowledge and connections with key people in the risk management world makes us ideally suited to finding you the right candidates at a time when demand is high and supply is short.
If your business requires more information on risk management recruitment or you would like to discuss your needs further, please visit www.barclaysimpson.com today.