By Peter UzohoÂ
The immediate past President/Chairman of Council, Chartered Institute of Bankers of Nigeria (CIBN), Prof. Segun Ajibola, has called on banks in the country to show totalÂ commitment towards the implementation of enterprise risk managementÂ (ERM) in their respective financial institutions.
He stated that faithful implementation of risk management framework in banksÂ isÂ theÂ responsibility of boards and must be seen andÂ acknowledged as such.
Ajibola said this in Lagos, atÂ his valedictory paperÂ entitled: â€œEnterprise Risk Management and Bank Performance: TheÂ Nexus,â€Â which marked the end of hisÂ tenureÂ as the 19th president of theÂ institute.
He said Nigerian banks should as a matter of urgency,Â review their risk management profile and migrate fully to ERM platform.
HeÂ pointed out that theÂ extant risk management templateÂ should be subjected to periodic review to align the same withÂ global best practices,Â addingthat findings had shown that ERM holds major implications for banksâ€™ performance.
The outgone CIBN bossÂ stressed that more integration of enterpriseÂ risk management should be encouraged in other financial institutionsÂ to facilitate improved performance inÂ financial system.
According to him, regulatory bodies should ensure that banks and other financial institutions adopt ERM framework and also pursue strict adherence to proper implementation and exposure, followed by necessary monitoring and supervision.
â€œBanks should engage and train all staff on the fundamentals ofÂ ERMÂ and develop a team that encourages organisational units, management and employees to become highlyÂ involved in the implementation process of their ERM frameworks,â€
He further said: â€œManagement and staff of banks/financial institutions and other stakeholders are indeed risk management ambassadors for the institutions and should see themselves in that light.
â€œDue diligence is required in managing the key performance indicators.
Accordingly, banks should continue to engage services of experts in credit, risk management, treasury and foreign exchange management, audit and compliance, domestic and foreign operations, ICT, etc. to minimise the risk on performance,â€ he noted.
Ajibola however,Â described ERM as an emerging field both in the corporate and academic environments, sayingÂ as aÂ newarea of specialisation, research in the area was stillÂ scanty with limited data to comprehensively capture the various aspects of the subject.
â€œConsequently, deploying primary data together with existing secondary data would undoubtedly add to the robustness of the enquiry in this area.
â€œIt is therefore my wish that further research in this veryÂ important field would extend the existing, albeit sparse, body of knowledge by incorporating other variables or proxies that would capture areas such as managerial, hazard and operational risks amongst other.â€
Earlier in her remark,Â theÂ Chairman of the occasion and former Deputy Governor of the Central Bank of Nigeria (CBN), Dr. Sarah Alade, congratulated Ajibola on his successful tenure, saying: â€œThe programme of today is a tribute to your dedication, hardwork and commitment to the institute.â€
She described the topic of the programme as timely and important, stressing that the size and complexity of banks and the volume ofÂ financial transactions they handle required that they apply an effective risk management techniques and monitor rapidly changing risk exposure.