Risk management progresses

When we ran the first ever POLRISK conference in May last year, there were still probably doubters as to how far Poland had progressed with risk management. On the one hand, one could see plenty of risk management seminars and workshops organised by

commercial players, but they were purely targeted at financial officers and banks, and concerned credit risks, currency exchange risks and the like. There was no talk of corporate enterprise risk management (ERM).

There were some pioneering companies, notably in the energy and oil sectors, that were supposedly ‘doing something’ in ERM. However, it was never published and confirmed. Some students and graduates contacted me about possible support in writing their diplomas and scientific papers on ERM. From time to time, POLRISK was asked to present the ERM approach at commercial seminars.

One of the most difficult decisions taken by the first POLRISK board was not to accept brokers and insurers as full members, but rather to give them the status of supporting members – who cannot serve on governing bodies of the association and cannot vote.

The intention was to give the young association more time to build its independent position on risk management and stay out of the otherwise inevitable insurance market domination. We have consistently kept to that course and have actually managed to be perceived as more of a managers’ association than an insurance buyer’s association. At the same time we have succeeded in maintaining a good relationship with insurers’ and brokers’ associations.

Today the snowball is apparently gaining momentum and quickly growing bigger. Corporations are no longer so shy about admitting they have been struggling with introducing ERM. They ask very good questions – some want to be assured that ERM is the way to go, while those some way down the road start asking the ‘how-to-achieve-this’ questions and are looking for know-how, experience, practitioners and tailored solutions.

It seems that POLRISK appeared on the scene at the ideal moment to get the snowball rolling in the right direction. However, there is still a lot to be done. We still lack risk management education at even the most elementary level.

Currently we have started selling the PRORIM course on our new web page (www.polrisk.pl) and we have approached the IRM regarding teaching their certificate in risk management locally in Poland.

Terminology troubles

The next tough battle we will have to fight will be about consistent risk terminology. So far, it has been dominated by finance people, who have tried to extend the purely financial risk management approach and terminology into the holistic dimension – which simply does not work.

POLRISK has taken a solid stance in supporting only those events that agree to use the broadly accepted ERM terminology and methodology, although the association does not explicitly promote any specific risk management good practice or standard.

We are seeing a growing interest in ERM within the whole energy sector, as well as by logistics and telecom companies. We have entered into informal but intensive cooperation with various business communities and environments. One of the best examples is our interaction with the Polish Institute of Directors (PID), which is a club-like foundation involving board members and executives of Polish companies listed on the Warsaw Stock Exchange. We at POLRISK have always been

convinced that those companies are the primary target for introducing ERM in Poland. We are pleased to see that a recent change in PID wording for the first time explicitly named managing the corporate risks as one of the executive board’s duties.

The POLRISK programme conference agenda shows that our risk management delegates are maturing. They already have some experience in risk management and are becoming really active. The risk management snowball is rolling fast now.

This has all come in time for Polish business people and decision makers to get ready for the EURO2012 challenge. This is the leading case study of our April conference. We consider our two day conference to be a major ‘risk training’ for all those that intend to be prepared for upside and downside risks arising from this major sporting event and its economic consequences.

Since most of our neighbouring countries, notably the Ukraine, do not yet have their own national risk management associations, the POLRISK board has invited their risk managers and insurance buyers to attend our conference on preferential terms. There is a chance that our second conference will be a truly international event.