ERM
Friday, September 4, 2020
By L.A. Winokur
Risk management folks aren't known for being touchy-feely types.
But these days, many are mindful of the moment, as companies take stock of their risk management programs and protocols and prepare themselves to come out on the other side of the COVID crisis with more robust and resilient corporate cultures.
One doesn't have to look far to find talk focusing on health and well-being, not to mention stress. And feelings. Risk professionals are speaking out about engaging with employees in more empathetic ways, and chief risk officers, typically more reserved, are even revealing their own emotions and vulnerabilities.
Chalk it up to COVID-19, a disruptive risk with a domino effect: a public health crisis that led to an economic crisis that, in turn, caused companies to make remote work, rife with its own set of risks, mandatory for many. That's what risk management players say is behind the burgeoning New Age bent.
They point out that, because of the pandemic, companies have prioritized people and their well-being like never before. All of this has resulted in a somewhat unconventional and ramped-up role for risk management.
Take Edward Hida, a partner in Deloitte's Risk and Financial Advisory practice, who believes that because of the broad shutdown impacting firms large and small, “there is a need for financial institutions themselves to have a bit of a different mission: to maintain employee well-being and support the community.”
He acknowledges this is decidedly a departure for risk management, which needs to “keep an eye on this.”
“Are employees able to work in a safe way?” he asks. “Are they able to get to work in a safe way? Do they feel safe?” These are among the many questions that will need to be top-of-mind for risk managers, he contends, adding what's critical, too, is “providing support to customers.”
It's necessary to “look at well-being holistically,” he noted.
Consider what Visa CRO, Paul Fabara, communicated to his firm's employees and others in late March via his Twitter account. “We're living in unprecedented times that can cause stress and anxiety,” he shared, also linking the tweet to an article offering advice on how to cope with this.
“Health and safety is now a top-five risk for any company for the first time,” said James Lam, a Boston-area based consultant with James Lam & Associates and a former CRO at GE Capital Markets Services and Fidelity Investments. The future, he elaborated, is likely to be a hybrid of remote and in-office work, “driven by the risk culture of the organization.”
COVID-19 Impact: Reimagining the CRO
“This crisis has made the role of the CRO even more critical and recognized,” maintains Lam, who is credited with being the first to hold the CRO job title during his days at GE Capital in the 1990s.
Being a CRO can be challenging. However, until now, CROs haven't been known for opening up about job stress or for focusing on feelings - their own, or those of others.
Indeed, CROs are expected to carry a certain stoicism, and to offer steady leadership during the worst of times, explained Clifford Rossi, the former CRO of Citigroup's consumer lending group. “You rarely see them let their guard down,” Rossi - a consultant with Chesapeake Risk Advisors and the Professor-of-the-Practice and Executive-in-Residence at the University of Maryland's Robert H. Smith School of Business - added.
But times are changing, and the COVID-19 crisis is clearly testing the mettle of CROs.
Consider, for example, the case of one newly-appointed global CRO working for a publicly-traded U.S. company. This executive, who reports to the company's board and requested anonymity, brought up COVID-19 during an executive team leadership meeting in early February - when it was still an emerging risk. “I was shouted down,” the CRO recalled. “People made fun out of it. People did not take it seriously.”
In the weeks that followed, the executive continued to beat the COVID-19 drum, but had trouble making headway. This kind of treatment has a “serious impact on your health and your private life, and is very, very stressful,” with “sleepless nights” spent worrying about what could happen, the CRO confided.
Ultimately, the executive's employer understood the potential impact of COVID-19 and the urgent need to manage its risks. But for the CRO it was an uphill battle. At one point, “there was a feeling of helplessness and a loss of self-esteem,” the executive explained. “However, you have to speak up, even if nobody supports you, or you're not doing your job.”
Fabara, meanwhile, feels fortunate, even though he found himself confronting the COVID-19 crisis head-on only months after starting his CRO job at Visa last September.
He said he reports to a chief executive officer whom he “respects tremendously” and who “lives and breathes” the company's core values. Moreover, he elaborated, Visa has a “dedicated” business resilience and continuity planning unit that had been preparing for a while. And yet, even with such support, keeping up with the pandemic pace has been exhausting, he admitted.
The WFH Model, and the Rise of Women in Risk
Talk of merging the personal and the professional - which has become more pronounced because of the pandemic - could easily be mistaken as a current risk management mantra of sorts. But it is actually helping move along a workplace culture shift that's been years in the making.
“For a long time, women have tried to get companies and bosses to believe people can be just as efficient working from home,” said Lisa Rawls, a KPMG Advisory principal for governance, risk and compliance (GRC) technology who is located in the Washington, D.C., area.
Her colleague, Cyndi Izzo, added that, because of what has been going on with COVID-19, “The world has become more accepting of the personal and professional being merged.” Izzo, based in the greater Boston area, is a principal for technology risk management.
“COVID-19 is a live case study of how people can be successful working remotely,” Izzo noted. “Before,” she continued, “if you were working from home, it was almost taboo if the dog barked or, heaven forbid, the baby was crying. You had to pretend like you didn't have a life.”
Rawls and Izzo were way ahead of this COVID-19 curve when, in March of 2018, they meshed the personal and the professional by teaming up to launch the firm's virtual Women of Risk Community.
The online community gives women (and men), both within and outside KPMG, the opportunity to discuss challenges facing risk professionals, Rawls explained. At the same time, the group also makes a point of connecting on a personal level and is committed to mentoring the next generation of women risk professionals, she said.
In June, the group hosted a web event, Being Inclusive: The Age of Authenticity, which drew about 850 participants. Among the panelists was Melanie Steiner, CRO for PVH Corp., a fashion and lifestyle company headquartered in New York.
In a segment of the webcast centering on best practices for staying connected in an authentic way, especially during COVID-19, Steiner - who has been PVH Corp.'s CRO since 2012 - commented on how compassionate communication is key. “Everyone is in different circumstances, and we all need to be aware of that,” she said. “It's a very stressful time.”
Parting Thoughts
COVID-19 has upped the ante for top risk executives. Visa's Fabara acknowledged that while CROs are expected to be the masters of all trades, they cannot handle everything alone. “Companies need to be realistic about the things we can and cannot do,” he opined.
It wasn't all that long ago that such self-reflective talk from a CRO - or any risk professional, for that matter - would have seemed out of place. But not during the time of the pandemic.
L.A. Winokur is a veteran business journalist based in the San Francisco Bay area.
•Bylaws •Code of Conduct •Privacy Notice •Terms of Use © 2024 Global Association of Risk Professionals