We conduct the Global Risk management Day on March 10th 2022, from 8:50 AM to 4:30 PM CET, on the 11th anniversary of the Fukushima disaster. It is a good risk management case because the Fukushima plant was prepared for different and multiple scenarios (tsunami, lack of power, flooring,) but not all of them happening simultaneously.
During Risk Management Day 2022, we will demonstrate cases on how resilient risk perspectives on managing Legal, Regulatory and Reputational Risks can supplement the traditional approach to understand risks:
- Describe how shortcomings in the ability to anticipate, both during design and during the response to the risks, laid the grounds for the unfortunate outcomes.
- Formal risk assessments trust established methods and models more than they should. Nevertheless, established processes and models have become accepted in practice because they seem to offer an acceptable trade-off between thoroughness and efficiency.
- The real test lies in the thorough analysis to identify all the risks that are ‘necessary,’ but without being unnecessarily costly in time or resources. This happens in every field of activity, and examples can easily be found in finance, engineering, production, medicine, offshore exploration etc.
Because severe accidents are rare, we quickly become overconfident in the analysis methods. The reasoning seems to go something like this:
- We have analysed the possible risks.
- We have built the installation system: the procedure, process following the recommendations.
- We have operated safely for n years – whatever n is. However, this reasoning is misleading because the absence of a failure does not prove that the precautions were correct or even sufficient.
Risk Protection Is Not the Freedom from Unacceptable Risks
Resilient and agile risk management advocates a constant sense of unease. We should be mindful of what we do to counteract the overconfidence that is a side effect of the relative safety of any risk scenario.
Resilient risk management provides;
- a way to identify the capabilities that a complex corporate socio-technical system must have to perform acceptably in everyday situations and during accidents.
- A contrast to the classical risk assessment method, classical risk assessment methods such as PRA (Probability Risk Assessment) by showing how things can go right and what is needed for this to happen, rather than just demonstrating how things can go wrong
- the ability to succeed during expected and unexpected conditions alike.
At the Risk Management Day, we describe the risks as a holistic system and understand how the various functions are coupled and depend on each other. Large-scale corporate socio-technical systems, including IT systems and installations, have become rather complicated that they seriously challenge established corporate risk management methods. While resilience risk management may not provide all-ready-made answers to the new problems, it does help us see them more clearly, and give the basic principles from which sustainable solutions can be developed.
At The Corporate Risk Management Day, we will provide guidance and showcase the best research, experiences, and risk applications across the following topics:
- Consistency analysis of corporate systems and assets
- Understanding high impact low probability corporate events for Risk appetite
- Control and optimisation of uncertain corporate processes and systems
- Planning future corporate performance and sustainability and IT systems under insecure times
- Modelling and quantifying uncertainty incorporate processes and systems
- Communicating risk to corporate stakeholders, management, and employees