By Obinna Chima
Firms in the country have been advised to imbibe risk management principles in order to remain as going concerns in view of the challenges in the economy.
The Managing Partner, Risk Management Consulting International Resources (RMCIR), Mr. Robert Mbonu, made this call during a programme titled: “Current Global Realities: The Imperatives of Risk Management,” that was organised by the firm in Lagos recently.
According to Mbonu, there is a misconception in Nigeria that risk management is for the financial services industry. He said his vision for RMCIR was to move risk management knowledge out of the financial sector, adding that the business of RMCIR was to make sure businesses perform better and deliver results.
He pointed out that knowledge of risk management can be applied to other sectors such as aviation, manufacturing, among others.
“An uncertainty only becomes a risk when there is an objective. Everything we do is surrounded by uncertainty. Risk is a mixture of danger and opportunities. Uncertainty is the risk that something may happen or may not happen, but risk becomes a reality when it occurs and that is what we need to prevent. We are facing a global economy which has a lot of risks.
“In Africa, failure of national governments is a major risk for the continent. Also, failure of critical infrastructure is another major risk. Unemployment and underemployment and of course, water crisis,” he said.
Mbonu highlighted risk management training as well as it identification as areas RMCIR would focus on.
“Risk identification is one step in the risk process where the risks that affects businesses are identified and prioritised. It is only when you have identified the risks that you now take steps to identify them. It is only when you have identified the risks that you can know those that can hurt your firm, those that can be more serious and those that can have greater impact.
“Another area we are going to be looking at is risk reporting, which has to do with helping businesses to report their risks and escalating issues that might be catastrophic. Finally, all of this comes to nothing unless a framework is designed.
“As the chief executive of a business, you must have some kind of dashboard that tells you what your critical risks are, what you should be looking out for, what you can let go for your executive management to handle and what you need to know. That is where the framework would be designed from. That framework is the architecture that enables you to understand what risk you are facing,” he added.