Post-COVID challenges for the Risk Function

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07 May 2021 | 5-minute read 

Chief risk officers are no strangers to adapting to significant changes in our industry. Yet those brought about by COVID-19, one of the most dramatic events in the market’s history, seriously tested the CRO’s capacity to adapt.

As the prospect of returning to the office draws nearer, many are now considering how working practices will be different in a post-COVID world. What will the long-term effects of this transformation be, and what implications will this have for risk management functions, teams and CROs?

This was the topic of discussion at the LMA’s recent CRO Forum: ‘Post-COVID – Challenges for the Risk Function’, where an esteemed panel of risk professionals (listed below) grappled with these fast approaching issues.

David Sansom, CRO, Lloyd’s

Carol-Ann Burton, Risk & Compliance Director, Argenta

Clare Barley, COO & formerly CRO, Asta

Adam Seager, CRO (Americas), Argo

Moderator: Vinay Mistry, CRO, Apollo, & Deputy Chair of the CRO committee

Corporate cohesion

Part of the discussion focussed on the importance of maintaining employee affinity and how the pandemic may have impacted employee loyalty.

“The sense of community that’s implicit in companies has definitely come under siege,” said Adam Seager, CRO (Americas) at Argo Group. “When we return to the office, we have to think carefully about how we maintain a corporate cohesion within our businesses, preserving our purpose while navigating a hybrid model of working.”

Other significant organisational challenges concern employee wellbeing and inclusivity, according to David Sansom, CRO at Lloyd’s. “The social capital among teams has eroded over the past year, and we need to build it back up. Employee health and wellbeing has been top of the agenda for quite some time but, now that we’re stepping into a new world of flexible working, we need to consider how we can maintain fairness and inclusion in order to retain employee affinity.”

‘People risk’

Mental health and wellbeing have risen up the corporate agenda in the past 12 months and risk professionals have an important role to play in maintaining this momentum. “Our collective experiences over the past year have cemented issues of wellbeing and mental health as top priorities. There is a distinct risk, however, that this could fall away,” said Clare Barley, COO (and former CRO) at Asta. “The temptation to simply ‘fix’ the risk takes over, as opposed to actually engaging with the risk itself; investigating what it is, how it manifests and what its impact might be. I hope that we will continue to focus on people risk in its rounder sense.”

This should be maintained in working practices as part of the ‘new normal’ that will soon be a reality. “Top of my agenda as we return to the office is bias risk. The bias of who you see and therefore how you treat and deal with those people will naturally come through, and we need to be cognisant of it,” said Clare, adding: “risk professionals in particular are going to need to be very aware of this. For example, how many conversations happen at the end of a hybrid call when the remote team members have gone? The bias of who was there and who wasn’t will come to the fore quickly and subtly. If we’re not alive to this, it will have huge influences on how decisions are made and, ultimately, how the company progresses.”

Lessons learned

In every facet of the industry, lessons learned from our experiences of the pandemic will need to be carried forward and applied. “As we move into this next stage, it’s important to take the best of what we’ve achieved and put it to use. For me, adaptability and flexibility are key. We’ve proven that we can do this, and we need to maintain it,” explained Carol-Ann Burton, Risk & Compliance Director at Argenta. She continued: “No one should be under the illusion that we’ll just wind back to February 2020. We don’t yet know what this new normal will be. We’ll need to have a plan, but recognise that the plan might change. One of the most important things a CRO can do is listen. We need to listen to the business and the feedback from our staff and roll with it: adapting and helping the organisation grow.”

All agreed, with David Sansom adding: “The COVID pandemic as a risk event is unique. We’ve had shocks to the industry before, but never this unique confluence of risks occurring. This gives us an opportunity to step back as risk practitioners and really think about how we do things. People often talk about risk management as both a science and an art. There’s lessons to learn on both sides but, for me, the biggest lessons will be around the culture of risk management. It’s vital that we take the opportunity as risk professionals to consider how we think about risks. There’s an opportunity here to think differently. As risk practitioners, we can use this experience to test ourselves and sharpen our thinking when contemplating the risks of our organisations.”

The overwhelming consensus is that our market has coped extremely well with the many challenges companies and individuals have faced over the past year. As normal life resumes, it is essential that the valuable lessons learned, and have been hard-won during the pandemic, feature strongly in hybrid working and risk professionals have a crucial role to play in that. If risk functions are the organisational glue that hold companies together, it is imperative that they remain strong as the industry pieces together new ways of working.

The next forum event will take place on Wednesday 30 June at 11.00. Details to be issued shortly.

Paul Davenport
Finance & Risk Director

Paul Davenport
Finance & Risk Director

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