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/

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)

[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

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 0422 000 913, 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

Silos.  It’s a word that can fill you with dread if your responsible for the governance of an organisation, yet they keep on appearing.  Organisational theory is currently aguing for matrix structures, but if you’ve ever tried to run one you’ll know that shared accountability without the right tools is the same as no accountability at all.  Silos are alive and well.

TDA has track record in brining these functions together for greatest impact.  We can help to ensure:

• Duplication between assurance functions is minimused
• Assurance programs are focused on what really matters
• Risk management has a top-down view of strategic risks
• Emerging risk capability informs the strategy and risk functions
• Strategic risk insight informs the strategy process
• Strategy drives capability development

To find out more, contact us.

I’m really pleased to announce that the Resilient Futures website went live today.

Resilient Futures was formed in April 2008 as a result of a number of practitioners in various fields believing that the current thinking in their respective professions was inadequate in dealing with the problems of tomorrow, and that resilience thinking and the concepts underpinning it provide much needed clarity in a rapidly changing interconnected world.

The Resilient Futures partnership consists of a divergent practitioners in strategy, risk, urban planning, leadership development and networked systems.  There is a range of innovative but practial thinking coming out of this one and I encourage you to have a look around, read a few articles, download a whitepaper or two, and subscribe to the RSS feed.

I particularly encourage you to have a look at my recent article Are you being a reckless leader without realising it? which gives a feel for where some of the thinking is heading, or our offering on emerging risk analysis here.

Resilient Futures can be found at www.resilientfutures.org.

Strategy, risk, governance and assurance

“Corporate governance, sustainability and strategy have become inseparable.  They are inextricably linked.” Mervyn E. King

A lot of firms specialise in strategy, risk, governance or assurance, but few seem to bring them all together. In everything TDA does, we bring the other disciplines to it, whether using risk management to underpin delivery of your strategy, or getting strategic alignment with these areas.

Please click on a link below to find out more.

Governance & Leadership

• Enterprise Governance – getting everyone on the same page
• Enterprise Resilience – positioning for prosperity in the face of dramatic change
• Compliance with the ASX Corporate Governance Council Principles and Recommendations

Strategy

• Relevance regained – strategic planning for NGOs
• Emerging Risk Analysis – seeing what’s around the corner before it hits

Risk & Assurance

• Fine tuning your Internal Audit function – Internal Audit transformation & quality reviews
• Getting the most out of internal audit sourcing – outsourcing, cosourcing and partnering
• Navigating the GRC maze – understanding GRC solutions and software selection
• Getting what was promised – project assurance and project risk management

Todd is a highly sought after speaker, commentator and evangelist in the fields of business, risk, governance and internal audit.  He is a regular commentator on topics such as emerging risk, resilience and makes an effort to stretch people’s thinking and point out the ’elephants in the room.’ in these areas.

Recent Articles

• AXA, Perpetual, Challenger – As the backloop grows stronger it draws more entities in | resilientfutures.org  | Oct 27 2008
• Resilient leadership? | resilientfutures.org  | Aug 29 2008
• Carbon Pollution Reduction Scheme – Main Event or a Side Show? | resilientfutres.org | Aug 23 2008
• Shell shocked | Risk Management Magazine | July 2008
• What can we learn from the WA Gas crisis? | resilientfutures.org | Jun 20 2008
• GRC – The Great Risk Con | Risk Management Magazine | June 2008
• Allco, ABC, Babcock. Should we have seen these coming? | resilientfutures.org | Jun 15 2008
• Are you being a reckless leader without realising it? | reslientfutures.org | May 18 2008  

Recent Publications  

Todd regulary contributes to a range of publications and guidance.  Some of these are listed below.

• Guidance to implementing Principle 7 of the ASX Corporate Governance Principle & Recommendatons – Recognise and Manage Risk (2007 release) | IIA-Australia
• Supplementary guidance on Principle 7 – Recognise and Manage Risk (2008) | ASX Corporate Governance Council
• Parliamentary inquiry into Internal Audit | NSW Department of Premier & Cabinet
• Principles & Recommendations of Good Corporate Governance (2007 release) | ASX Corporate Governance Council

Speaking circuit

Some of his recent speaking engagements. 

• Understanding Strategic Risk | National masterclass series – IIA-Australia
• 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.

Public comment

Todd was recently appointed as the Institute of Internal Auditors of Australia’s Policy Director and is their spokesman, technical advisor and author on technical, policy and advocacy matters in relation to governance, risk, control, audit, assurance and related matters in Australia.  Copies of his statements, presentations and articles are available at www.iia.org.au.

Academia & education

Todd leads and/or develops the majority of short courses and masterclasses for IIA-Australia on complex and emerging areas.  These include:

• 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)