Though it's not clear how they might define enterprise risk management, it is clear that in both developed and developing countries in the Middle East there is an earlier recognition of the value underlying a more effective approach to risk management, no matter the label it might receive.
One example of this is the invitation I received to keynote the Second Annual MENA (Middle East North Africa) ERM conference held in Dubai in May. This opportunity came to me through the Risk and Insurance Management Society Inc. in New York. Its annual educational conference and exhibition will include enterprise risk management related sessions. All this to say that interested parties from the other side of the globe are recognizing and requesting U.S.-based expertise and assistance in delivering this advanced and progressive capability.
More evidence of this trend emerged as I finished teaching risk management in Toronto for RIMS just this week. I was contacted by a Pakistan-based educational organization asking if I'd bring an ERM oriented workshop to executives in Karachi and Lahore. Interestingly I'd received at least three other similar inquiries from that part of the world in the last year, for delivery of similar knowledge in Jakarta, Malaysia and Kuala Lampur. Other independent consultant friends have received similar inquiries in the recent past as well. I find it interesting that they're reaching half way around the world to secure this expertise when I have always understood that Europe and to some degree the South Pacific had typically been way ahead of North America in this realm. ISO 31000 is just one example of this advantage. With its genesis in New Zealand and Australia, it is clear to me that it has not been Americans charting much of this course. One possible reason, and not the best impetus of this I might add, may have been the regulatory assertiveness of those regions. Of course in the wake of the 2008 financial crisis, we are catching up quickly.
Yet another example of this trend is the development of insurance markets in countries like Afghanistan where I was recently asked to consider joining an executive team to help deliver and reinforce this emerging capability. Not that insurance markets are much of a sign of progressive risk management, but at least in this case, the principals were interested in me at least in part as a function of my enterprise risk management background and leanings; a small but encouraging sign of an evolving perspective about risk management that should facilitate the further evolution of the discipline.
It is even more encouraging that developing countries and those with little or no focus on risk management are desirous of leaping ahead to doing it right from the jump. No doubt they need and will leverage insurance mechanisms where feasible, but this trend suggests an earlier than typical recognition that insurance is just one mitigation technique and not the center of the risk universe as some purveyors of insurance solutions would have us believe. No offense intended to my friends in the insurance realm; a necessary tool indeed. More next month on other surprising signs of "early recognition" of the enterprise risk management value proposition.
CHRIS MANDEL is the president, Excellence in Risk Management LLC, and executive vice president, rPM3 Solutions LLC, a long-term risk management leader and former president of RIMS.
May 1, 2012
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