There goes another one.  The year 2000 has come and gone, it only seems like yesterday we were all celebrating the birth of a new century.  This year has been an exciting one for risk managers with the development of formal educational products quickening amongst Universities and TAFE.  The year 2001 is shaping up to be the best ever for the progress of risk management to a profession.

 

Risk management is still in the process of becoming a core business activity, ever year the interest increases.  However the profession is blurred because of the inability of risk practitioners to understand and encompass an integrated viewpoint.  A large number of professions claim to be risk managers but in fact are managers of the facets of risk, in other words functional or tactical risk managers.  This only serves to fragment the industry and confuse the target companies who would benefit greatly from an integrated approach to risk management. 

 

Risk management practitioners must learn to respect the other fellow who claims to be a risk manager as well and separate risk into two levels, the strategic and the functional.  Then they must ask themselves "am I a manager of the strategic process or am I a manager of a function or functions?  If the answer is focused on the latter then you must recognise that you are a functional risk manager and not a risk manager in the integrated sense.  There is nothing wrong with that assessment and if honesty prevailed then the concept of risk would move forward in leaps and bounds.  Disparate groups could then link up to form teams for the management of risk.

 

Upon looking back over the year I have found great movements within the risk organisations of Australia and several universities, mine in particular but little movement forward for the professionalism of the industry from within.  Risk practitioners must embrace the concept of a profession and accept with that the need for education and development.  Those that don't evolve will not be in a revitalized profession in the future but rather will remain in a functional position.  Life and opportunity will pass them by. It is really time to be proactive and make sure you take control of the process and not be a victim in the process but rather a survivor.  We must understand the inclusive nature of risk management and not the exclusive world of the past.  Conceptually, but not in practice the corporate sector is ahead of the educational sector, however words do not translate into action or change.

 

 With this in mind I repeat again my words of the last two years.

 

"As risk managers you are now faced with a choice.  You can:

Remain in a functional position, with the duties dictated by the whims of the management team.Take up the challenge that is on offer and make the function a profession.

 

You can take up the challenge through support, through lobbying and through demonstrating that you are a professional in all things that you do.  We have to define the profession and give a focus on the attainment of formal qualifications.   Increasingly, the change process is being given impetus by the tertiary sector, which is focusing on the opportunities that are emerging in the field.

 

But the push for change will not succeed if the industry and the practitioners do not become increasingly demanding and vocal."

 

I wonder how many years into the future the end of year summary can continue the above quote; this is the third year in a row.  The change process is slow until change champions take the profession by storm.

 

This year we have look at various aspects of risk and in addition to the student projects have continued looking at risk as an integrated discipline.  The articles for 2000 included:

 

The umbrella insurance policy: Garry Harrison of Aon discussed the value of an umbrella policy as a risk management tool.Captive insurance companies: Richard Cassidy of BHP looked at the corporate advantages and disadvantages of owing a captive.Duration and interest rate risk: Melanie Ferger, was an exchange student from Germany and she look at the concept of duration as an interest rate risk management tool. Duration is the effective management to maturity of a security by allowing for time and cash-flow effect.Risk management and small business failure: Peter Wilson of the CBA examined the Churchill curve and its relationship to business failure and hypothesized the segments of the curve do have an effect on the timing of business failure. A trip overseas: An examination of the perils in traveling to countries that could have an adverse health impact due to environmental conditions.The ten recurring patterns: A book review on The World of Risk" by Mark Haynes.Trends and developments for the future: a report on an examination of risk patterns around the world and reference to ANZ4360/1999.Creating the pathway for corporate change: a listing of the aspects and considerations points to create a constructive pathway for the management of change within an organisation.Environmental dimensions of risk management: Claudio Senese of Telstra look at the environmental impact of decisions and how a process can be put in place for a valid corporate approach to environmental issues.The survival of the learning organisation: a pathway for survival and the professionalism of the risk management industry.

 

That is all for this year, I wish you and all your families and happy and safe Christmas and a new year filled with opportunity and fulfillment.  It is up to you to shake the trees and force the cold winds of change through the Australian public and private sectors.

 

2001, hopefully the year in which will be looked back upon as the year the risk management function became a profession.

 

I look forward to working with you in the year 2001, see you in February.