CERM® Risk Insights

Guest Post by James Kline (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

In February 2021, the Organization for Economic Cooperation and Development (OECD) published an Enterprise Risk Management Maturity Model. This model is designed for Tax Administration Agencies. It is the culmination of work that began in 2018. This work was designed to develop stand-alone maturity models for a broad range of organizational activities. One of which was Enterprise Risk Management. This piece examines this model and discusses how such models are being used by government elsewhere.

Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

The Pareto Principle, or more commonly the “80/20 rule”, is based upon the observation that 80% of the consequences of something are attributable to 20% of the causes.  The quality guru Joseph Moses Juran named the Principle in 1941 after the Italian economist who, in 1896, observed that 80% of the land in Italy was owned by 20% of the population.  The centenarian also similarly observed that 80% of quality problems result from 20% of the causes.  In the business world we also see that 80% of a company’s revenue is generated by only 20% of its customers.  As with life, things are not distributed either evenly or even fairly.

Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

“That’s a Red Flag!” goes the cry from some when something amiss is recognised.  However, many project participants don’t realise that their Project sails through a sea of flags and that, on some occasion, the flags can be read as red by somebody at some time.

In a similar nautical vein the Roman writer Ovid once poetized “The man who has experienced shipwreck shudders even at a calm sea“.  While written some 2,000 years ago it is as true today as it ever was and a reminder to us all that risks lurk everywhere.  Some risks may not be identified, let alone assessed and may go unnoticed until they strike.  We need to be aware and vigilant and avoid a complacent belief that a risk register is the be all and end all.

Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Email is 50 this year…its Golden Anniversary!  It ‘happened’ in 1971 when Ray Tomlinson, the late computer engineer and first user, sent a transmission to himself utilising two independent computers…a revolutionary innovation at the time.  The content of that primordial message is long forgotten and the same may also be the fate of many of the ~300 billion emails that are sent almost every day by the estimated 4 billion users around the world.  Communication is said to bring us together or set us apart and email is no different.

Guest Post by Geary Sikich (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

The Ever Given grounding in the Suez Canal is one of those events that will be labeled a “Black Swan” for sure.  A rouge wind hits the ship turning the stern and wedging the vessel, bow and stern grounded straddling the canal and stranding ships entering from either end.  The date Tuesday 23 March 2021.  At around 7.40 a.m. local time the Ever Given ran aground.  At nearly 200 feet wide and 1,300 feet long, it easily took up the width of the channel.

[Read more…]

Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Organisations use different management systems to provide the required foundation to direct and control their activities to achieve their objectives.

When the organisational structure is complex, the organisation needs to develop a robust, practical, yet simplified, integrated management system. This strategy-focused integrated management system will fully integrate all relevant management practices and common touchpoints of the business into one coherent and synchronised management system. In doing so, it enables and drives the achievement of its corporate strategy and improve or drives performance.

Guest Post by James Kline (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Paul Gladieux has over 45 years of experience working in the quality profession. In 1991, he founded Global Quality Management Advisors (GQM Advisors). The group provides quality-related services focused on management system design, development, compliance, and certification in a wide range of sectors.  His clients in the energy sector include companies such as: NuScale Power LLC, BWX Technologies, Westinghouse Nuclear AP1000 Program, Terra Power LLC, Worley Energy | Chemicals, U.S. Department of Energy, Westinghouse Nuclear, Vigor Industrials LLC, and Alyeska Pipeline Service Company.

Guest Post by Howard M. Wiener (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Iterative software development approaches have been around since the 1950s but many mark the beginning of what is commonly thought of as Agile as the creation of the Agile Manifesto, a document written by a number of software engineers in 2001, which contains 12 principles that serve as guidelines to how software projects should be conducted.  Since then, professional services and product organizations have taken Agile and bent and twisted it into proprietary commercial forms for their own gain. 

Guest Post by John Ayers (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

A black swan event has a very low probability of happening but if it does the consequences are devastating. The black swan event for Texas was the weather and the consequence was catastrophic to their power grid.  Prior to the February 2021 snowstorm with freezing temperatures, you must go back to December 1929 to find the last historical Texas snowstorm. The storm lasted for 24 hours dropping 12 inches of snow with freezing temperatures. But they did not have natural gas, windmills and solar panels to worry about like today. 

Guest Post by Daniel Burrus (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Even as I write this article, jobs in industries ranging from entertainment and media to manufacturing and medicine are being transformed by artificial intelligence (AI) and its many iterations. Many people don’t even know they are already in a competition with AI and that several facets of their job are already being accomplished by a digital application or intelligent machine. Workers will not be able to outpace these machines simply by working longer hours or moving faster on the assembly line.

Guest Post by Andrew Sheves (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Becoming a risk manager can seem to be more art than science. There’s not a clear pathway from degree to junior risk manager to senior risk manager to CRO (Chief Risk Officer) in the same way that you can chart the progress from freshly minted CPA (Certified Public Accountant) to head of Ernst & Young. (Financial risk management is the exception here as there is usually a clear path there.)

So why is the risk manager career path fuzzy compared to other professions?

Guest Post by Andrew Sheves (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Googling ‘what is a risk manager?’ will get you variations on ‘it’s the person who manages that organization’s risks,’ which is a pretty weak answer. It’s certainly not enough to help anyone who’s just starting in the role to understand what they’re supposed to do. Similarly, if someone’s thinking about this as a career, we need a bit more.

So here’s a more detailed answer.

Guest Post by Joseph Paris (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

It’s January 2020.  I have just made a pitch to the corporate big-wigs for a way to reduce their real-estate costs (premises including rent and utilities), their corporate travel costs, even their carbon footprint using the latest telephony and collaborative applications.  I postulate that they will even see an increase in productivity while improving their employee’s work-life balance; no more one-hour commutes each way.

Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

“Man measures time by happiness or sorrow, tranquility or torture.  The one is past and gone so quickly that is seldom seized and savored while the other turns the hours into days and the weeks into years”.  This was written by Major Pat Reid in “The Colditz Story” and, while it comes from a time of internment at a dark time in history the same is true today.

Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Many valuable lessons can be learned from the failures of risk governance in Australian banks.

The Commonwealth Bank of Australia (CBA) and Westpac Banking Corporation (Westpac), two of the largest banks in Australia had to provide Court Enforceable Undertakings in May 2018 and December 2021 respectively to the Australian Prudential Regulation Authority (APRA).