Global Risk Agility and Decision Making TLT020 Dante A. Disparte Founder & CEO, Risk Cooperative Chair, Business Council for American Security Board Member, American Security Project Co-Author, Global Risk Agility and Decision Making (Macmillan, Q2, 2016) Contact information: ddisparte@riskcooperative.com LinkedIn Twitter: @ddisparte
Learning Objectives Achieving organizational resilience in the era of man-made risk requires new approaches to risk management and decision making. We call this global risk agility. An appreciation of the great risk convergence Man-made and natural risks are colliding with unforeseen consequences. Key risk domains and their ramifications Cyber risk, climate change and terrorism are but a few man-made risks to contend with. Achieving global risk agility Building a values-based approach to risk and decision making enhancing resilience.
The great risk convergence Man-made Risk Natural Risk
Learning Objectives:
Welcome to a new geologic age, the Anthropocene, which scientist say began in the 1950s. By 2030 there will be 8.5 billion people on the planet. > More of humanity lives inside the circle than outside of it. > The balance of global economic output is titled toward emerging markets and south of the Equator making this the emerging market s century. > Homo Urbanus presents both risks and opportunities for long term adaptation.
The Wheel of Misfortune The wheel of misfortune from the World Economic Forum shows that major risk domains are interconnected and exacerbated by accelerating change. > The E.U. s Schengen Agreement has been shattered by large-scale migration. > National governance and integration are fraying in advanced markets. > Heavy urbanization combined with high youth unemployment make for a combustible mix. > Society, companies, decision makers and risk managers must navigate this minefield.
Coping with Climate Change Welcome to Friedman s hot, flat and crowded world. Climate-related impacts are being felt the world over: > 2014 was the hottest instrumentally recorded year in the U.S. > 2015 was the hottest globally. > The largest El Niño ever recorded. > Warmest single day in the Arctic. > Largest recorded snowfall in Boston. > Named freak storms year round.
What would you do in a world without risk? 16
Move over Panama Canal there is a Northern open ocean route and undersea land grab underway.
Cyber risk is the new normal Cyber risk is increasingly defining the 21 st century, with virtually every facet of the global economy exposed to this insidious threat. > The 2003 Great Blackout plunged much of the North East and parts of Canada into darkness because of tree branches in Ohio. > Today, this risk has brought the private and public sectors to their knees in largescale hacks this is very well the tip of the iceberg. > The rise of ransomware and business models being kidnapped is an alarming new trend. > Resilience requires pre-investment over a long horizon.
Societal polarization and otherness The rise of economic nationalism, extreme political movements and ideology is driven by a wide range of factors affecting virtually every country. > Political leaders are scrambling to shut borders, risking the fragmentation of the Eurozone, feared Brexit and a return to Fortress America. > ISIS is now an export terrorist organization, claiming attacks in once safe countries. > The tradeoff between safety and security take center stage suggesting a comovement of these objectives.
Dealing with any one risk domain on its own is daunting. Dealing with the interconnections and pesky risks that do not respect boundaries requires new approaches to risk and decision making. A more agile framework is needed making it everyone s business to stay in business.
Achieving risk agility
moves risk from cost to catalyst
and is dynamic
Key attributes of agile risk managers > Driven by value systems that are not meaningless words on a wall, but espoused by the tone at the top and individual behavior. > Defined by a rise in corporate activism on the left and right these organizations and people stand for something. > Entrepreneurial by nature despite their size and fear of consequences they make it everyone s business to stay in business. > They are proactive about risk knowing that bad news only gets worse if it is hidden. > They aspire to the third dimension of risk management remaining in the room when the decisions are being made.
Thank You