Risk Managers Tighten Whistle-Blowing Structures

03 Oct 2011

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President of  RIMAN, Mr. Emmanuel Abolo

By Obinna Chima

As part of efforts to avert another crisis in the Nigerian banking industry, the Risk Management Association of Nigeria (RIMAN) said its members have established whistle-blowing framework in their respective organisations.

President of  RIMAN, Mr. Emmanuel Abolo, who disclosed this in an interview with newsmen, also said that several other risk management tools were being  implemented in firms, especially financial institutions, to forestall a re-occurrence of another crisis in the industry. He maintained that creating whistle-blowing framework was the job of the risk manager.

Abolo said: “A risk manager who knows his onions should know that whistle-blowing is one of the tools he can use to manage risk. So, in various institutions today, they have whistle-blowers. Those architectures have been put in place by the risk managers themselves. It is just one of those tools because there are several other tools they can use to address risk. We need to drive home the point that risk management is everybody’s responsibility, right from the gateman to the top management level.”

Abolo who works with the Nigerian Export Import Bank, also disclosed that RIMAN had been consulting with various institutions to make sure that they seriously adhere to the principles of risk management.

Commenting on the lessons from the crisis in the banking industry, which was finally resolved last Friday, he said: “The lesson for the association is that we need to play a more critical role in trying to prevent another crisis in the industry. Yes of course, we did play some role, but maybe we were not very proactive and also the fact that we need to go beyond risk management and to focus also on the issues of corporate governance. You would discover that the Basel two accords actually have an important document that talks about the relationship between corporate governance and risk management.

“In fact, corporate governance is actually part of risk management.  So, the lessons for us is that in trying to manage risk, we must not lose sight of the issues of corporate governance because when there is corporate governance failure, it transmits into serious crisis for any industry. Lesson for us also is that we need to train people, create more awareness about the importance of risk management, we need to insist that those who want to practise must be certified and we also need to work on companies to make sure that they expose their staff to risk management because risk management is everybody’s responsibility.”

Abolo restated that what created the crisis (in the banking industry) was that many board members of firms had ignored the risk managers.
He argued that risk managers, particularly the chief risk officer in any institution, should be a board member or a senior management officer, who should be able to influence decisions in any institution.

Abolo added: “Risk managers should be able to convince business owners that business decisions cannot be taken outside risk management. Our argument at RIMAN is that chief risk officers must be operating at the Board level, decisions should not be taken outside the chief risk officer. He must be aware, he must be able to contribute and tell them the risk implication of whatever business decisions are being taken.”

Tags: Business, Nigeria, Featured, Emmanuel Abolo

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