(A conversation with Paul Archer)
About Risk Management
The discipline of risk management involves the application of strategies for identifying, assessing and managing threats to institutions’ interests, primarily its material assets. Risk management has assumed a considerably greater significance in the information technology age, given the advent of data-related risks, and the need to develop specialised risk management strategies to respond to these.
SB: How would you define risk management?
PA: Simply put Risk Management is the process of identifying, assessing and controlling the opportunities and threats to an organisation’s earnings and assets. In the risk management framework of an organisation, identified risks are constantly reviewed and monitored to continually improve the management of risks throughout the organisation.
SB: Are companies here assessing their risks and exposures properly? What is the best approach they can take to formulate risk management plans for their businesses?
PA: Risk management is not only about threats facing an organisation. Opportunities are also a major focus of the risk management framework. We all can see the present ongoing investment by commercial and industrial entities in anticipation of the upcoming increase in economic activity in Guyana. Business and project opportunities can be evaluated by the risk management process which will be the tool executive management will use in their decision-making as to what level of risk to take if they do embrace any particular business venture.
SB: Should larger firms have risk management departments to monitor the plan?
PA: In the absence of a Risk Officer at the executive level, companies can utilise the services of a risk management company to develop, implement and monitor their risk management plan. The key to successful risk management is for the reports to be placed at the executive management level. This facilitates buy-in from top to bottom in the enterprise enhancing the risk culture of the entire organisation. Effective risk management strategies have been proven to improve the bottom line of companies.
We can see around us the business landscape in Guyana is changing. We all know of the internationally publicised emerging risks like climate change, terrorism and cybercrime among others, which need to be addressed in a serious way.
Implementation of robust incident response plans will help to prevent or mitigate occurrences that would affect common business risks like operational, legal, compliance or reputational risks.
SB: Why is it important for everyone to be on board in the development of a sound risk management plan?
PA: The implementation, monitoring and evaluation of the risk management programme needs to include all levels. The staff in the workshops, drivers and sales representatives know the risks which they face daily and possess the information which can assist in managing the risks a company faces.
One example that can be discussed is beverage delivery. The trucks have to manoeuvre in heavy traffic which takes up a lot of time and also increases the risks of accidents. Most beverage outlets have large outside storage units which can be replenished during the night by the delivery staff who would need access to these facilities. A cost benefit analysis of this entire process with inputs from all the associated staff would have to be carried out to determine if this process is feasible.
SB: How does one get involved in the field of Risk Management?
PA: The risk management designation does assist in one being able to be up to date with latest trends and information as you will have access to the Risk Management Society which is the risk management body that all risk managers are affiliated to.
In May, at the request of the Insurance Institute of Guyana, Paul Archer made a presentation on the Fundamentals of Risk Management to 35 representatives from the insurance industry.
Paul Archer holds the Canadian Risk Management designation (CRM) and the Associate in Risk Management (ARM) from the Insurance Institute of America. He is a member of the Ontario Risk and Insurance Management Society (ORIMS) and the Risk Management Society (RIMS).
Paul can be contacted via email at paul.riskmanagerguyana@gmail.com or his company’s website losscontrolriskmanagementguyana.business.site
