September 2, 2019 by David Gambrill, Editor-in-Chief
Christine Maligec, 2019 RIMS Canada Conference Co-Chair, talks about the shifting environment for risk managers and how they can adapt in the future.
cu | What are some emerging issues you see for risk managers in the future?
Aging infrastructure. It’s been added on to the World Economic Forum’s annual global risk report. It’s not a problem that’s isolated to any specific country or region. It is a global systemic problem. Infrastructure grew after the Second World War, when we put some of these systems into place, and we continued to build into the 80s and 90s and 2000s. We have pulled back on funding the maintenance of these systems, and now we are at a point when we have crumbling infrastructure underground. Our sewers and waterlines are starting to degrade. We’ve got electrical grid systems that are hanging by a thread and almost obsolete. A technology-based future requires sustaining power in a new urban environment.
cu | This ties in with a second emerging issue you have mentioned…
Yes, climate change and adaptation. As we have built communities, we have taken away green space, which is Mother Nature’s flood mitigation system. The infrastructure we currently have is not able to manage those 5-year, 10-year or 20-year events. We’re not prepared to deal with the aging infrastructure that we have, and the climate around us is continuing to change. We are presently experiencing two things in Alberta: fire issues in the north, and water issues.
It’s either super-dry or moisture-rich in Alberta. We’re starting to have a conflict with Nature. We need to do a better job of taking care of the Nature. And most of the infrastructure that we build has to be resilient to those changes, too.
cu | How does climate change affect a risk manager?
The effect depends upon the certain discipline of risk you are in. If you are an insurance risk person, and that’s specifically what you deal with, you have to be incredibly mindful of your asset inventory, your total insured value, and any exclusions you may have on your insurance policies. If there is one of those 20- or 50- or 100-year flooding events that affect your organization’s property, you need to have the terms and conditions to be able to deal with that.
From a mitigation perspective, you need to have conversations internally with stakeholders. Take an engineering group, for example. You might say to them, ‘Look, we’re not going to get $100 million in new funding, that’s not going to happen. But let’s talk about resiliency.’ There are flood mitigation systems that, for a small investment, can certainly protect high-value assets. Especially where there are things like inventory or electrical systems. We can make minor adaptations while decision-makers someplace else are trying to figure that big systemic funding problem.
cu | What skills are valuable to future risk managers when dealing with these kinds of emerging issues?
One valuable skill set is problem-solving. I think the perception is that risk managers just buy insurance, but now we have to become problem-solvers. And it’s not just problem-solving for aging infrastructure and climate change adaptation. How do we help an organization meet its objectives? The objectives could be, ‘How do we integrate more options for transportation solutions? How do we increase the social well-being of communities?’ Or they could also include increased workflow integration, if you are delivering a product or service, or advancing your environmental image, if you are resource extraction agency. Helping to problem-solve is going to be one of the skillsets for a risk manager of the future.
cu | Can you elaborate on what the risk manager of the future will look like?
We are risk managers, we’re not risk avoiders. Everything is changing around us. We cannot be the merchants of ‘no.’ We cannot tell our organizations that we cannot do something. We have to work with our organizations and stakeholders to help everybody find the right ‘yes.’
Our mindset should be that we are a stakeholder at the board table to help with decision-making; to help make risk-informed decisions; to help make strategic, enterprise-based decisions. And we need to be more collaborative within our organizations. Why? Everyone is a risk manager within an organization. It’s not just the risk professional. You have people in the engineering group, communications and marketing, strategic planning, governance and HR, for example. All of these people manage risk in some special way. Risk managers should be the conduit to that conversation, pulling people in. When you group all of those people together, you create a “wisdom of the crowd,” that informal Delphi group within an organization. You bloom better knowledge, better collaboration, better innovation, better decision-making within the organization that is risk-informed. You are spending less time just looking at a checklist of things, or just buying insurance, or telling people that they can’t do something. You are actually adding value to the corporation.
cu | What about risk managers in smaller organizations? Does this apply to them as well?
I don’t think scale of the organization is the barrier, the barrier is the mindset. The mindset of the organization should be that it wants to evaluate itself in that type of a [collaborative] framework. It has the humility to appreciate that things aren’t perfect and appreciates the spirit of continuous improvement. For any risk manager, you need to understand what the problem is that you are trying to solve, because you could come up with some pretty brilliant solutions for a problem that doesn’t actually exist for you. Set the context. Once you establish your context, spend some time in that space. Then you can get into risk identification, risk assessment, and risk evaluation stages. After that, you can start managing the risk. That risk could be an opportunity to enter into a joint venture, create a new product, and enter into a merger or acquisition, or innovation. Value creation is where risk managers should really be spending their time.
cu | You have incorporated the themes of diversity and inclusion into the 2019 RIMS Canada Conference in Edmonton. Tell us how.
We are really looking at this conference from a humanities perspective. We are looking at what it takes not only to be good risk managers, but what it takes to be good corporate citizens, good to each other, and even good to ourselves. We are incorporating a wellness center, we are putting in a gratitude wall, and we are trying to incorporate indigenous art and content as best we can. We are changing the conversation to think about more than just business, numbers, and insurance. There is actually a human element to what we do. Let’s bring that perspective moving forward. In our concurrent sessions, we’ve asked our presenters to not just put a deck up with a bunch of bullet points. The richness of conversation is amazing. In addition to a wonderful leadership panel, Dr. Marvin Washington from the University of Alberta will talk about the human side of change.