The Art of Risk Management

Amsterdam is midway through the construction project of the north-south metro line (photo © ANP). The 8-year project began in 2002 and is costing €1.7billion, double the figure projected in 1996! But there are hugh problems realizing it. Where the risks underestimated? The contracts not well designed? Council and alderman amateurs? The managers, planners and civil engineers inadequate or not in control ? Or was it the attitude of central governemnt?

Former Minister Veerman will lead the commission which will investigate the course of this project, with one mission: to audit the quality of risk management. Finally! Recognition of risk management as a true profession and a crucial factor for proper project management and good public governance. Is risk management perhaps an art in reaching goals and targets within budget and on time?

3rd General Assembly 2008

Dear members,

It is our pleasure to send you hereby a summary of the 3rd General Assembly of PRIMO Europe, held on the 12th of December 2008 in Brussels.

As you may know we founded PRIMO Europe on the 6th of December 2007 as an International Non-Profit Association, based in Brussels and working under Belgian Law. Our thanks goes to Ronny Frederickx for the good work he has done to make this formal establishment possible.

We, PRIMO Europe, are a very young, but bright and ambitious organisation. In 2008 we reconstructed our administrative, legal and financial management to be ready for the future. We thank John O’Dea who did tremendous efforts to reorganize and restructure PRIMO Europe into a financial healthy association.

Three Risk Framing Devices

Today risk management seems a booming term. Every day politicians, managers and experts use the term, in close relation to the financial crisis we face today. And every day the term is often mispronounced and not used in the right context. It is wat happened with the term sustainable. It has thousands and thousands of interpretations. So let us be careful with the use of “risk” and “risk management”.

In all the hectic discussions of the credit crisis it is recommended to read this article from the hand of John Adams. He clears our mind, brings us back to where risk management is all about. He connects the dots within the landscape of risk management. His view.

Financial Risk Outlook 2009

Every city and village in Europe, and with them politicians and managers, will be confronted with the financial crisis by the way policies and projects can and will be forecasted and budgetted. The flooding of the risk crisis is not yet over. The water level is still high. And when the “water” falls to its normal level we will be confronted with the results on economy and society, on our inhabitants and companies.

What is the financial risk outlook for this year? The Financial Services Authority (FSA) launched its report. It is clear: It will affect the public domain. They need for quality information is high, for the sake of good public governance.

The top 10 business risks for 2009

“What challenges are likely to affect your company in 2009 and beyond? The credit crunch aftershocks and the deepening global recession, rank as the most important business risks for 2009, displacing regulation and compliance from the top spot. Green initiatives, competition from new entrants, human capital issues, and reputational risk all rose in The new Ernst & Young report.

It identifies the top 10 global business risks

Global economic crime survey 2007

PricewaterhouseCoopers launched its report “Economic crime: People, culture and controls” on the basis of eight years of data on trends, perceptions and incidents of fraud: “Despite heightened efforts at regulation and companies’ investments in controls, fraud remains a major threat to companies around the world. From simple theft to more complex schemes involving management and corruption, the threat continues regardless of a company’s size, location or industry.

PricewaterhouseCoopers’ Global economic crime survey 2007 points to the continued evidence of the intractability of fraud. Entitled Economic crime: People, culture and controls, the report reveals that internal controls alone are not enough to fight it. Instead, controls must be backed by a strong ethical company culture, a broad risk management programme, and “zero tolerance” of executives or other employees who commit economic crimes.

This year’s survey is based on months of interviews of over 5,400 companies located in 40 countries. It is the largest, most comprehensive international survey of economic crime. The report also includes the results of over 1,500 interviews of senior company executives about their experience doing business in seven emerging market economies.” to Survey PWC.

Global Risks 2009

Global Risks 2009, a report coordinated by the World Economic Forum, identifies deteriorating fiscal positions, a hard landing in China, a collapse in asset prices, gaps in global governance and issues relating to natural resources and climate as the pivotal risks facing the world this year.

To Global Risk Forum

Managing and Reducing Social Vulnerabilities

This white paper of the International Risk Governance Council (IRGC) focusses on five critical infrastructures related to social vulnerabilities.

“This White Paper on ‘Managing and Reducing Social Vulnerabilities: from Coupled critical Infrastructures’ is the second in which we publish recommendations for the risk governance of a particular problem field. We have chosen to focus on five infrastructures: electric power supply, gas supply, urban water supply and waste water treatment, rail transport and systems for general information and communication services. These share a number of similarities: all involve distributed complex physical networks, are organised along similar value chains with elements embedded within the socio-political-economic framework and are subject to significant and continually evolving risk-shaping factors and contextual changes.

We follow our look at the individual infrastructures by assessing their characteristics (including their levels of interdependence with other infrastructures), their criticality and the adequacy of their risk governance. From this assessment we conclude that, at least in much of Europe and North America, the electric power and ICT infrastructures are both highly critical and suffer from inadequate risk governance. (We acknowledge that such a conclusion may be different for other parts of the World.) We offer, additionally, some suggestions for areas in which further study may be needed before definitive policy recommendations can be made. “

Download Managing and Reducing Social Vulnerabilities

Strategic Risk Management

By Torben Andersen, Associate Professor at the Copenhagen Business School

Turbulence and change are prevalent characteristics of global markets that expose organizations to many environmental phenomena beyond managerial control and these risk events may have significant adverse effects on economic outcomes. Societal wealth creation, therefore, depends on the ability of public and private enterprises to organize in ways that make them responsive to these often unforeseeable influences.