Speaking & training circuit

Save the date:

• The Black Swan Myth Debunked | Corporate Risk Management – Strategic Resilience for Emerging Risks | May 26-27 2011 | Swisshotel | Sydney

Recent speaking engagements:

• Best practices in public sector internal audit, audit committees and risk management | IIA Asia Pacific Conference (SOPAC)
• New global risk standard – ISO 31000 | Interview with Michael Parkinson on the new global standard (available in streaming video)
• Providing Internal Audit Opinions | National masterclass & webinar series – IIA-Australia
• Understanding Strategic Risk | National masterclass series – IIA-Australia
• Risk and Responsibility | Association of Heads of Australian University Colleges and Halls (AHAUCHI) national congress (available in streaming video)
• Smashing Open the Addiction to Business as Usual | Bryant University / MA Chamber of Commerce (USA)
• The Real Risks of Business as Usual | WA Water Strategy & Climate Change Resilient Futures Strategy Forum
• Audit Opinions – Part of the process or optional extra | AICD National Public Sector Conference
• Building a Good Audit Committee | SOPAC – IIA’s premier regional conference for Australia, South Pacific & Asia (with Jon Isaacs – prominent Audit Committe Chair)
• Futurecasting | Mega trends for forecasting, strategy and risk in a rapidly changing world – ACL user’s forum
• ASX Corporate Governance Council’s Revised Corporate Governance Principles and Recommendations | Intitute of Internal Auditors Canberra Chapter
• Internal audit as a change agent | ICAA Business forum Victoria (CPE week, Melbourne)
• From the Backroom to the Boardroom – a new horizon for Internal Audit | IIA Western Australian Internal Audit congress, Perth
• Fundamental change in the Audit Profession… Where is it going, how will it affect you and what do you need to do about it? | NSW Internal Audit congresses, Sydney, Penrith (IIAA)
• Corporate Governance and Risk Management for Not for Profits and NGOs | Australian Society of Association Executives, Sydney (AuSAE)
• Pulse Radio – a case study in radical innovation | LQA Innovation program, Melbourne
• Fundamental change in the Audit Profession… Where is it going, how will it affect you and what do you need to do about it? | Association of University Auditors (ACUA) Australian National Conference, Sydney.

Academia & education

Todd led and/or developed the majority of short courses and masterclasses for IIA-Australia on complex and emerging areas from 2008-2010. These included:

• Strategic risk
• Mastering the new Principle 7 (Recognise and Manage Risk) of the Australian Stock Exchange Corporate Governance Principles & Recommendations
• The new International Professional Practices Framework
• Providing internal audit opinions
• Technical & Regulatory updates
• A range of other ad-hoc topics.

In addition Todd has been a guest lecturer and tutor at the following:

• Advanced Management Accounting Module | Institute of Chartered Accountants – (CA Program)
• Cashflow forecasting, financial modelling and valuation models | Edith Cowan University (National Enterprise Workshop)
• Company Law – Edith Cowan University | (Bachelor of Business Program)

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Insanity is doing the same things over and over and expecting different results.

Albert Einstein

Thanks to Lexis Nexis for making my most recent article available from the current issue of Risk Management Today to my clients and readers.

The editorial panel was asked to cast their mind back to the most significant risk events over the last 12 months. For mine it was a thematic observation that despite strategic risk being the risk class which causes the greatest long term destruction and creation of shareholder value, it the class of risk most poorly handled. There are many reasons for this, but perhaps the greatest is that these tend to be slowly unfolding events over multiple years and therefore tend to not grab our attention in the same way that a sudden shock does.

The good news is that this risk class is starting to get the attention of the mainstream at the big end of town. The bad news is that there are many spruikers who are apparently suddenly well equipped to deal with this class of risk. My assessment is there’s very little substance to much of what’s on offer. This article offers a festive perspective and (hopefully) a little humour to a serious topic as well as a few pragmatic suggestions on how to get on top of this important risk class.

I hope you enjoy it as a light read during the quiet period and I look forward to catching up with you in the new year.

Key points

• ASX Principle 7 requires a focus on material business risks rather than being swamped by process. At the time of drafting the current Principles, the Corporate Governance Council was concerned that companies were being dragged into the minutia by risk processes rather than using them for strategic insights. From a shareholder perspective it seems their concerns were correct.
• Most risk assessments work on the assumption that all things remain the same. The biggest risk of all is that all things don’t remain the same. This is where black swans often are hiding.
• Here’s a bunch of things to think about over the Christmas break.

Please feel free to download the article and pass it on. (Risk Management Today Issue 6 -Black swans, 3 pages, 132kB)

More information on this publication can be found here.

Seasons greetings,

Todd

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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.

http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/

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Risk and Responsibility (AHAUCHI Conference, September 2009)

[Streaming video: YouTube - 3 parts, 22 minutes total]

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)

[Streaming and downloadable video: Resilientfutures.org - 1 part, 15 minutes total]

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

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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.

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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

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