Daniel Butler, Aon’s Head of Financial Institutions for EMEA, chaired the CRO Panel Discussion on “Managing Non-Financial Risks to Build Organizational Resilience” on Day 2 of RiskMinds International, the world’s leading risk management event for financial institutions. Here we explore the key themes that were raised in the discussion.
Responding to a Changing Work Environment
Since its introduction in 2008, Basel II has driven regulation within risk management in banks. In turn, this has led to increased investment and capital, theoretically making banks more resilient.
However, this regulated landscape has created silos in risk management which have made managing the volatility of today’s world a greater challenge for CROs.
One potential solution offered by the panel was the process of bringing risk and HR communities together, creating the possibility of predictive analytics in non-financial risk management. CROs have already made strides towards closer partnerships with CPOs, facilitating a deeper understanding of the potential financial impacts of people risks across organizations. Working with CPOs also enables more informed decisions around the talent needed to address key risks.
Closer partnerships between risk managers and the people element of businesses were also identified as the basis of a strong risk culture, which has climbed the list of strategic objectives for financial institutions. The panel discussed the role of this collaborative effort in reminding people that they are at the center of risk. In practice, tabletop exercises are a useful tool to develop firms’ muscle memory when responding to potential threats.
Ultimately, CROs need a better view of risks in whatever shape or form they manifest. Improving organizational resilience amid expanding threats is reliant on a collaborative approach to risk management, with both risk and people functions working towards the development of strong risk cultures.