As the developed world pulls itself away from the abyss of the global financial crisis, many around the globe are breathing a sigh of relief. Having dodged a major bullet, organizations are now returning to business as usual. But if the crisis was a wake-up-call for the world, did business leaders and internal auditors pay attention or just hit the snooze alarm? What’s the next “black swan,” or significant unforeseen risk, and what should internal auditors be doing about it?
In this free feature from IIA’s global magazine, Todd summarises several key areas should be on all company watch lists for 2010 and beyond.
A lot has been happening with the Resilient Futures Forum this year. Resilient Futures has been kind enough to record some of their work and make it available to the public free of charge. Highlights from Todd’s work with resilientfutures.org are set out below. Click on a heading to watch / listen.
Risk and Responsibility (AHAUCHI Conference, September 2009)
Presented as part of a three day strategy and leadership conference on the future of residential colleges, Todd Davies provides insights into the nexus between governance, leadership and risk, and provides a whole systems perspective into regulatory reform, avoiding the next GFC and the future of leadership on these dimensions.
A Leader’s Responsibility: Governance, Risk and Resilience (AHAUCHI Pre-conference, August 2009) [Streaming and downloadable audio: Resilientfutures.org - 1 part, 26 minutes total] As part of the lead up to the AHAUCHI sessions, Todd discusses the new context for the governance and risk responsibilities of leaders, especially directors and managers; the breakdown of conventional methods of risk and governance management in dealing with these conditions; the consequences of such a breakdown; new processes for more realistic governance, risk and resilience.
The Real Risks of Business as Usual (Resilient Futures Forum event – “Planning for Growth: Water? Climate Change? Economic Shocks?, August 2008)
This is essential viewing for anyone in a governance, leadership, assurance or strategy role in a large organisation – corporate or government. This presentation is particularly timely given current conditions, increasing market turbulence, and the move by stock exchanges and regulators around the world who are beginning to expect CEOs and Boards to have a strong understanding of ‘material business risk’, and hence strategic risk.
There is also a lot of great material on the resilientfutures.org website and their Youtube channel. If you are interested in understanding the future, complexity and the challenges and opportunities arising from this, these sites are well worth a look. Enjoy. TDA
Strategic risk capability is one of the key capabilities of our time.
As part of their ongoing roles, Directors and CEOs need to have a deep understanding of the strategic risks and opportunties facing their organisations. Increasingly they are looking to their internal audit team for a view on whether their company’s risk management systems are adequate, and complete which needs an understanding of strategic risk as well as traditional areas of compliance, reporting and operations.
Strategic risk management is an area which is vital to the long term prosperity and performance of any organisation, yet it is an area which is not well understood or applied. While auditors and managers are often comfortable with operational, reporting and compliance risk, it is often strategic risk that leads to material and irreversible business disruption. Internal audit teams are now expected to have an understanding of strategic risk and evaluate their organisation’s capabilities in this area as emphasised in Principle 7 of the ASX Corporate Governance Principles & Recommendations.
As part of the Institute of Internal Auditors ongoing work to enhance the capabilities of their members they have engaged TDA to facilitate a series of half-day public courses on strategic risk. The course covers strategic risk as a distinct segment on the COSO framework, sources of strategic risk, strategic risk capability and a range of concepts to help understand and assess strategic risk.
Developed for Chief Audit Executives, by the end of this course, participants should be able to:
Differentiate strategic risk from other risk types in the overall risk universe
Recognise how strategic risk manifests itself
Assess their organisation’s ability to identify, assess and manage strategic risk
Identify areas of strategic risk vulnerability in their organisation
Interact confidently with those responsible for leadership in this area.
Dates for the rest of the year are:
Melbourne: Thursday, September 10 2009
Perth: Friday, September 25 2009
Sydney: Friday, November 6 2009
For more information go to the Education & Events section of www.iia.org.au or call the IIA on (02) 9267 9155.
If you are not an internal auditor and would like a briefing session for your organisation, please contact us at info[at]todddavies.com.au or contact Todd on (0) 422 000 913.
Success is a lousy teacher. It seduces smart people into thinking they can’t lose. Bill Gates
Most managers feel well equipped to understand and respond to the regular crises that emerge day to day in the business as usual environment. Risk management processes have permeated most organisations which give middle management a sense of comfort that they have things broadly under control.
But those who read the financial press will be aware of emerging state changes which are not picked up by their normal risk management processes. As such, Directors and Chief Executives reviewing their risk profiles often feel that all of this effort in risk management is missing the big picture.
Emerging risks are known by many names. Strategic planners call them external shocks. Resilience practitioners call them discontinuities. Risk practitioners call them strategic risks. Economists call them corrections. Taleb calls them Black Swan events. Greenspan calls it the age of turbulence.
Whatever you call them, an understanding of emerging strategic risks is critical to leading any organisation.
We have a habit of confusing the unprecedented with the unlikely. Al Gore, Sydney Hilton, July 15, 2009
Todd Davies & Associates draws on a broad range of experts from a range of fields to provide briefings, training and advisory services on:
Making sense of emerging and interconnected structural shifts, and how to turn these from strategic risks into strategic opportunities
Making sense of unprecedented risks which are becoming increasingly certain
Detailed briefings on each of these structural shifts
Assessing and developing the capabilities in organisations to assess strategic risk on an ongoing basis.
To find out more, call Todd on 02 9043 1719, or email us to arrange a meeting.
What our clients are saying
“We brought Todd Davies in to conduct the “Understanding Strategic Risk” training sessions and they proved to be very worthwhile. Our audit staff appreciated the insights into sources of strategic risk from a local to a global level. No less than six methods of developing strategic capability were discussed providing something for everyone dependent upon your methodology, fit and preferences. Sound value.” Allan Reidy | Head of Westpac Retail & Business Banking and Product & Operations Audit, Westpac Banking Corporation
Find out more first
Watch a 15 minute video presentation from Todd on gaps arising from typical risk management processes
Listen to a 25 minute audio interview with Todd on some of the key issues for leaders today
Read a brief article on strategic risk and how this fits in with regulation and standard setting
New insights. Independent advice. Positioning you for success.
Sydney / NSW South Coast
+61 (2) 9043 1719
info@todddavies.com.au
