The Active Risk Blog


This headline may come as no surprise, given that the UK recently voted to leave the EU and the somewhat unexpected result of Donald Trump becoming president-elect of the USA. However, this was the view from you our customers, taken from the survey that many of you completed during our Global Conferences in summer 2016. Most of you had taken part in the survey before the EU referendum or the USA presidential election had come to pass and it just highlights how in these uncertain times you never know what is just around the corner. Both of these outcomes were unexpected, and indeed this time in 2015, although both were on the horizon, political risk wasn’t mentioned at all when we asked you about the biggest threat to your business.   In the summer of 2016, 44% of organizations in the ...  



While working on a presentation for a Mining sector conference recently, it struck me just how important risk management is for ensuring that strategic plans become reality. Not just risk management per se, but fully integrated risk, where pretty much everyone in the organization is involved.   Here's why. Often risk management responsibilities are allocated to a relatively small group of individuals with specific functions like safety, environmental management, operations, finance and strategic planning. This tends to lead to a siloed risk management structure where risks are managed independently with limited communication with other domains. Many risks remain invisible to other parts of the organization because they're expected to be handled as a part of the daily responsibilities within a specific domain area, even though they have broader impacts. An enterprise-wide approach to risk consolidates risks from all domains into a common ...  



ARM demonstrates global reach citing customers from Europe, Middle East, Australasia and North America   Maidenhead, UK. 6 September 2016 – Sword Active Risk has been selected for the shortlist for the Risk Management, Product of the Year award. The award entry includes examples of how ARM is used by a diverse range of clients including:   Bruce Power, where ARM manages risk and opportunity across all of its capital projects at two power generating stations in Canada Ameren Transmission (Illinois, USA), where they have a strong risk management culture. ARM is used to identify and mitigate risk for all projects across all regions, and includes project approval and contingency budgeting. Downer’s Rail division where they developed the first Australian ‘live’ risk register to operate across disciplines, both enterprise-wide and national. ARM supports Downer’s award-winning framework for safety, health, environment and quality (SHREQ). TSB, UK-based challenger ...  



Risk Chart 1

‘Black Swan’ is a recognized theory within risk management, originally developed by Nassim Nicholas Taleb. For those of you that have ever wondered, the term ‘Black Swan’ originates from the belief that all swans are white because these were the only ones accounted for. However, when black swans were discovered during the 17th century in Australia, this unexpected event in scientific history profoundly changed zoology. After the black swan was discovered it seemed obvious that black swans had to exist just as other animals with varying colors were known to exist. Taleb made his financial trading reputation out of targeting the impact of highly improbably events.   The importance of the metaphor is that it describes an event that is highly unlikely to materialize but if it did, would have a substantial impact. In traditional enterprise risk methodologies the assessment of this ...  



Risk Management

On July 15th 2016 the Office of Management and Budget, an Executive Office for the President, released a major revision to OMB A-123. Now entitled ‘Management’s Responsibility for Enterprise Risk Management and Internal Control’ the new version underlines the importance of the relationship between Internal Controls and Enterprise Risk Management (ERM). This is the next step following the introduction of ‘risk based thinking’ in ISO9001:2015.   To our minds, we are seeing a natural progression as organizations worldwide look to improve performance by operating at higher levels of risk maturity which integrate ERM, Internal Controls, and Governance in a closed-loop process.  

  In OMB A-123, the administration emphasizes the importance of having appropriate risk management processes and systems in place to identify challenges early, to bring them to the attention of agency leadership and to develop solutions.   It also states that implementation of this policy ...