Global tensions place risk managers in a bind

That situation has been compounded by the shock of Brexit and a newfound corporate solipsism.

The ongoing uncertainty over Brexit poses a significant issue for business. “If we could just agree what we’re doing, we’ll be fine,” said Richard Watson, Imperial College’s so-called futurist in residence.

“It’s just this lack of knowing that’s the problem,” he summarised. “We just need to know what the heck is going on and we’ll deal with it.”

But the seismic changes occurring across the globe will also bring opportunities. Speaking on a panel at the Airmic conference in Harrogate, David Eveleigh, the group general counsel and company secretary at government contractor Serco, said his company could spring into action if Brexit goes ahead.

“Borders are not going to police themselves,” he said, noting that neither health or immigration - both sectors that Serco is involved in - were going to cease to require management.

But he said that if the separation did not go ahead, there would be a period of stabilisation and a boom in infrastructure investment that has been on hold during the Brexit talks with the EU.

Watson said he was delivering a workshop at a bank the day the outcome of the referendum was announced.

“From what I recall it was like herding cats in thick fog at the end of a zombie apocalypse,” he said.

“They were just in shock - they were caught unaware and I was shocked that they were shocked.”

“There had clearly been two possibilities - and for some reason they hadn’t taken one of them very seriously.”

“One of the problems with success in any organisation is that you develop a sort of enduring capacity to believe that your thinking is always correct,” he deduced. “And the more senior you become, the more this tends to happen.”

“Such self-centred certainty can result in disagreements - and does. But also in thinking that there’s no need for thinking - and this is one of the emergent risks,” he said.

He said the vote represented a retreat from globalisation pointing to a group of people who thought that “economics can be trumped by identity”.

But the desire to put up barriers isn’t the only risk that Watson sees on the horizon. He foresees a world in which people disconnect from digital technologies driven by an information overload. He said that the idea that the internet of things could be hacked only made that worse.

Matthew Drew, group security director for Rolls-Royce, said his firm was heavily exposed to a continuous risk of theft from “state sponsored, very well funded and relentless” groups trying to steal the firm’s knowhow.

He said the threat to the engineering firm, which has military contracts and depends on intellectual property, stemmed from hackers, as well as commercial espionage from spies close to its staff and factories.

But there was one more malignant threat that Drew identified and that was one from company insiders stealing data.

He said the firm was looking at new technology “all the time” to monitor access to Rolls-Royce’s networks, data and facilities. He said that technology was able to monitor unusual behaviour to find clues about who may be stealing data.

He said they would then look into those individuals to find out whether they were about to leave or be made redundant, which would add to the suspicion.

Speaking on the same panel, Angela Iannetta, who is group head of risk and insurance at British American Tobacco, defended Drew’s right to monitor that technology.

“There is a lot of data being monitored,” she said. “When you’re working for an organisation - using their system, their tools, working for them - then essentially what you’re looking at, what you’re reviewing, should be accessible.”

“I don’t think the employee should have confidentiality rights over what their doing on their organisations time.”

But even with that data, it’s impossible to eliminate every risk in the view of Eveleigh, who points to Serco’s operations that extend to everything from air traffic control to hospital cleaning.

“It’s not a risk free world,” he said. “When you’re in a company as broad as serco, at any one point, somebody will be doing something silly [with] 55,000 people, you’re not going to be on top of every risk.”

“Very few FTSE companies are going down a list [of rules] and saying we’re not complying,” he said. “But there will be some scandal or risk that they won’t be aware of.”

His solution? He said directors were in a difficult position and that they should spend less time in the boardroom and more time around the business to understand the risks they face.