SlideShare a Scribd company logo
ARiMI	–	Asia	Risk	Management	Institute	
By MARC RONEZ
Chief Risk Strategist & Knowledge Leader
ARIMI – Asia Risk Management Institute
NOTES	
IOD Global Convention 2017–
Singapore, 14th December 2017
Board's	Risk	Management	:	Focus	on	
Sustainability	Issues	and	the	Ethic	Gap	
Challenge
Agenda	for	this	Session			
þ Shifting the focus of Management from SHORT-term profit
to LONG-term sustainable performance
þ Expanding the focus from Creating SHAREHOLDERS
Value to Creating STAKEHOLDERS SHARED Value
þ Supporting Risk & Performance Management SYSTEMS
with a strong Risk Management CULTURE grounded on
solid Ethical foundations
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 3
Changes,	Risks	&	Crises..	Can	take	many	forms		
Terrorism Diseases
Earthquake
Pollution
Bank run
SubprimeExplosion
NGO
Attack Lawsuits
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 4
With	Disastrous	Consequences:	Corporate	Scandals	
&	FAILURES	
9/11
Fukushima
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 5
Root Causes for Organization's problems
The investigations that followed each of these cases, and
many others, revealed one COMMON element behind the
institutions‘ troubles:
The People’s Factor!
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 6
“To	educate	a	man	in	knowledge	but	NOT	in	morals	
is	to	create	a	menace	to	society.	“	
Theodore	Roosevelt,	USA	president	
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 7
8
Lack	of	ETHICS	will	eventually	impede	Sustainability	
"It's only when the tide goes out that … you learn who's been
swimming naked."
Warren Buffett, Berkshire Hathaway
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Understanding	Corporate	Governance	–	Who	are	all	
the	Parties	involved	in	the	Corporate	"Game”	?	
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 9
OWNERSHIP
CONTROL
Management
(Agent)
Shareholders
(Principal)
B.O.D - Board of
Directors
?
Any other
Stakeholders that
matter.. ?
Agency	Relationships	and	the	Alignment	Gap	
The Problem is… that human beings are inherently Self-
centered & SELF INTERESTED …
..and hence in case of Conflict of Interests,
… there is the possibility of opportunistic, self-interested
behaviour on the part of the AGENT that works AGAINST
the welfare of the PRINCIPAL and other Stakeholders.
How could this Happen?
10Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Can	you	TRUST	your	Boss,	staff,	suppliers,	
customers,	etc?	The	Agency	Problem.	
1.  Inherent Conflict of Interest: The interests of principal
(shareholders) and agent (Management) will DIVERGE
2.  Lack of Control: With its delegation of authority, the
agent can make the decisions he wants and it is difficult
for the Principal to interfere and organize effective
control.
3.  Lack of Transparency & Information asymmetry: The
agent’s actions are HIDDEN from the principal or are
costly to observe. The agent possesses information that
is, for the principal unobservable or costly to obtain.
11Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Increased	PRESURES	on	Resources,	human	
communities	&	Environment
12Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Business has been viewed increasingly as a major cause of
Social, Environmental and Economic problems.
Criticisms against Business Activities
13Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Companies and their leaders are widely perceived to seek
profits on the short-term for themselves at the expense of
the broader community and futures generations.
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 14
If we destroy this
one..
any Plan B?
An OUTDATED model of value creation?
In their pursuit of Short-term Financial Profits,
Companies overlook :
­ the well-being of their customers,
­ the depletion of natural resources vital to their
businesses,
­ the viability of key suppliers,
­ or the economic distress of the communities in which
they produce and sell?
­ And other ethical issues
15Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
You	cannot	be	healthy	in	the	long	run	if	your	value	
chain	ecosystem	is	unhealthy	
Key Partners:
(Supply
Chain)
Raw Materials,
Goods &
Services
Competitors
& New Entrants
YOUR
ORGANIZATION
Key Partners:
(Routes to
Markets, Channels)
Distributors,
Complementors,
Vendors, etc.
Customers
(Segments &
Profiles)
Prospectivecustomers
Substitutes
Source: Marc Ronez – Asia Risk Management Institute
Who are your competitors and what is the intensity of the competition in your marketplace.
How easy is it to enter your industry? Are there substitutes products /services that can
answer the needs of your customer just as effectively?
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 16
Corporate	Governance	&	Social	Responsibility:	
Aligning	Stakeholders’	Rising	&	Diverging	Interests	
Government
& Regulators
ORGANIZATION
External Auditors
Rating Agencies
Customers
Shareholders
/ Investors
coverage and pressure
groups scrutiny
Decisions to
invest or to
hold its shares
Regulatory
Framework
& control
Competitors’
behaviors
Lending funds
& at what rate
Partners
/Suppliers
Competitors
Media / Public
/ Pressure Groups
Lenders
Management/
Employees
Audit
requirements
Ratings
requirements
Needs met or
not
supply at
what price
productive
or not
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 17
Similarly the Objectives of the CODES of
Corporate Governance is .. SUSTAINABILITY
þ Control the impact of Greed, conflict of interest and Fraud
þ Force accountability and responsibility by to executives
þ Ensure information symmetry to truly gauge financial
health of company and build transparency into processes
þ Provide protection of investors, employees and other
relevant stakeholders
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 18
The Centrality of the
ROLE of the Board of
Directors
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 19
New	Codes	of	Corporate	Governance	put	clearly	the	
responsibility	of	Risk	Management	on	the	Board	of	
Directors	
A number of aspects of ERM are closely aligned to the work of the
board:
þ  Determine Strategic approach to risk-taking and set risk
appetite and policy
þ  Establish organizational structure for risk management
þ  Monitor the effectiveness of Risk Management Systems in
Place, and
þ  Establish ERM values and promote a Risk-Aware corporate
culture
þ  Monitor the Key Risks and anticipate on critical emerging
challenges
20Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
How to Nuture Risk Aware & Ethical Behavior
in your organization?
Understanding the key factors of Unethical behaviors, it will
help to:
1.  Set & monitor indicators of pressures on employees to
engage in unethical actions and/or commit fraud through
effective Performance Management Systems
2.  Reduce an individual’s ability to commit fraud and
remain undetected for long periods through effective
Governance & Controls systems
3.  Promote a more ethical and risk aware environment
inside the organization
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 21
A framework for Managing Ethical Risk & Building a
Risk Aware Culture
Code	Conduct	
&	Ethics	
Management	
Leadership	
Communication	
&	Training	
Set	clearly	the	
principles	&	
values	to	guide	
behaviors	
Top	
Management	
must	lead	by	
example	
Provide	
information,	
induction,	
training	&	
mentorship	
EMBED	in	PROCESSES,	SYSTEMS	&	CULTURE	
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Human	Capital	
Cycle	
Management	
Hire,	Reward	
&	Promote	the	
right	
employees	
HEALTHY	SUSTAINABLE	ORGANIZATION	
22
Detection	&	
Remediation	
Set	
appropriate,	
Resources	
Processes	&	
Tools
The	Objective	of	Risk	Management	is	that	…	
.. an organisation takes risk KNOWINGLY and
manage risk exposure INTELLIGENTLY
.. in a controlled (or balanced) manner so that the
business is viable for a longer term (SUSTAINABILITY)
while meeting the expectation of all the relevant
stakeholders by CREATING SHARED VALUE
(i.e., shareholders, customers/policyholders, employees,
regulators, rating agencies, suppliers, etc).
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 23
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 24
A recognized expert with more than 20 years of experience both as a practitioner &
trainer for large MNCs, Governments & Charities.
Areas of expertise include ERM, risk decision-making processes, Corporate Governance,
Business Ethics, Social Responsibility, risk-aware culture, risk communication and crisis
management, Business Model/Strategy Risk Management, corporate learning systems
development.
MBA from the University of Chicago Booth, an MSc in
Insurance & a LLM from the University of La Sorbonne,
Master Degree in Advance Business Research from UNISA –
University of South Australia
Marc has an MBA from the University of Chicago Booth GSB, MSc in
Insurance from the Université De Paris I - Panthéon-Sorbonne, LL.M.
from Université Panthéon-Assas (Paris II) and Master’s Degree in
Advanced Business Practice from University of South Australia. He is a
Fellow in Applied Risk Management (FARM) from the CARM Institute.
ARiMI – Asia Risk Management Institute, ESSEC
Business School
Work
Education
What do I do?
I help managers & leaders to use Risk
Management to:
þ RESOLVE difficult operational and
business challenges
þ TAKE & MANAGE risks effectively to
build sustainable & profitable growth
models
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 25
Risk	Management	is	a	continuous	journey,	not	a	
destination!	
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Marc Ronez is on Linkedin & WordPress
You can find his profile & read his blogs at:
P: www.linkedin.com/in/marc-ronez
B: theriskmanagementparadox.com
B: riskmanagementdemystified.com
26
ARiMI	–	Asia	Risk	Management	Institute	
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 27
28
For more information on ARiMI,
check our website at:
www.arimi.org
Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
Developing Effective Leaders & Decision-
makers for complex & volatile times
Important Note: Please note that that this presentation and its
contents, is the intellectual property of the Asia Risk Management
Institute Pte Ltd. It has been prepared for this IOD conference 2017
event and it cannot be used for any other purposes without the
specific written consent of the Asia Risk Management Institute.
Whilst any third party information contained in this document has
been obtained from sources believed to be reliable, no
representations are made as to its accuracy or completeness.
Further, ARiMI expressly disclaims any responsibility for liability or
loss arising from use of such information or from any of ARiMI's
comments upon it.
29Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017

More Related Content

What's hot

Deloitte es grc_sostenibilidad-reputation-survey
Deloitte es grc_sostenibilidad-reputation-surveyDeloitte es grc_sostenibilidad-reputation-survey
Deloitte es grc_sostenibilidad-reputation-survey
Bluemap Consulting Group
 
Strategic Risk_FERMA Forum issue
Strategic Risk_FERMA Forum issueStrategic Risk_FERMA Forum issue
Strategic Risk_FERMA Forum issue
Anna Korbut
 
Ciso NYC
Ciso NYCCiso NYC
Ciso NYC
BrianHouse
 
CPDone ABCOMP 2015
CPDone ABCOMP 2015CPDone ABCOMP 2015
CPDone ABCOMP 2015
CPDone
 
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
ypytlik
 
OSACO brochure - Finance
OSACO brochure - FinanceOSACO brochure - Finance
OSACO brochure - Finance
Jaydene Buckley
 
OSACO brocure Overview - Banking
OSACO brocure Overview - BankingOSACO brocure Overview - Banking
OSACO brocure Overview - Banking
Sean Buckley
 
Risk Management ERM Presentation
Risk Management ERM PresentationRisk Management ERM Presentation
Risk Management ERM Presentation
alygale
 
Erm indian-higher-education
Erm indian-higher-educationErm indian-higher-education
Erm indian-higher-education
IRM India Affiliate
 
Climate change-risk-management-guidance-report
Climate change-risk-management-guidance-reportClimate change-risk-management-guidance-report
Climate change-risk-management-guidance-report
IRM India Affiliate
 
Cyber Risk Management IRM India Affiliate
Cyber Risk Management IRM India AffiliateCyber Risk Management IRM India Affiliate
Cyber Risk Management IRM India Affiliate
IRM India Affiliate
 
How to embed emerging risk identification and management IRMindia Affiliate
How to embed emerging risk identification and management IRMindia AffiliateHow to embed emerging risk identification and management IRMindia Affiliate
How to embed emerging risk identification and management IRMindia Affiliate
IRM India Affiliate
 
An Industry Overview: Enterprise Risk Services and Products
An Industry Overview: Enterprise Risk Services and ProductsAn Industry Overview: Enterprise Risk Services and Products
An Industry Overview: Enterprise Risk Services and Products
s0P5a41b
 
Advanced Risk Management - Elsam Management Consultants
Advanced Risk Management - Elsam Management ConsultantsAdvanced Risk Management - Elsam Management Consultants
Advanced Risk Management - Elsam Management Consultants
EMAC Consulting Group
 
Hr erm-whitepaper
Hr erm-whitepaperHr erm-whitepaper
Hr erm-whitepaper
hiaamir
 
Risk Management Frameworks
Risk Management FrameworksRisk Management Frameworks
Risk Management Frameworks
Daniel Kapellmann Zafra
 
View from the top. A board-level perspective of current business risks
View from the top. A board-level perspective of current business risksView from the top. A board-level perspective of current business risks
View from the top. A board-level perspective of current business risks
The Economist Media Businesses
 
Holistic risk management
Holistic risk managementHolistic risk management
Holistic risk management
The Economist Media Businesses
 
Enterprise risk magazine - IRM India Affiliate
Enterprise risk magazine - IRM India Affiliate Enterprise risk magazine - IRM India Affiliate
Enterprise risk magazine - IRM India Affiliate
IRM India Affiliate
 
The management of reputation risk and airline sustainability
The management of reputation risk and airline sustainabilityThe management of reputation risk and airline sustainability
The management of reputation risk and airline sustainability
Лаккосс Пятачок- Заде
 

What's hot (20)

Deloitte es grc_sostenibilidad-reputation-survey
Deloitte es grc_sostenibilidad-reputation-surveyDeloitte es grc_sostenibilidad-reputation-survey
Deloitte es grc_sostenibilidad-reputation-survey
 
Strategic Risk_FERMA Forum issue
Strategic Risk_FERMA Forum issueStrategic Risk_FERMA Forum issue
Strategic Risk_FERMA Forum issue
 
Ciso NYC
Ciso NYCCiso NYC
Ciso NYC
 
CPDone ABCOMP 2015
CPDone ABCOMP 2015CPDone ABCOMP 2015
CPDone ABCOMP 2015
 
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
 
OSACO brochure - Finance
OSACO brochure - FinanceOSACO brochure - Finance
OSACO brochure - Finance
 
OSACO brocure Overview - Banking
OSACO brocure Overview - BankingOSACO brocure Overview - Banking
OSACO brocure Overview - Banking
 
Risk Management ERM Presentation
Risk Management ERM PresentationRisk Management ERM Presentation
Risk Management ERM Presentation
 
Erm indian-higher-education
Erm indian-higher-educationErm indian-higher-education
Erm indian-higher-education
 
Climate change-risk-management-guidance-report
Climate change-risk-management-guidance-reportClimate change-risk-management-guidance-report
Climate change-risk-management-guidance-report
 
Cyber Risk Management IRM India Affiliate
Cyber Risk Management IRM India AffiliateCyber Risk Management IRM India Affiliate
Cyber Risk Management IRM India Affiliate
 
How to embed emerging risk identification and management IRMindia Affiliate
How to embed emerging risk identification and management IRMindia AffiliateHow to embed emerging risk identification and management IRMindia Affiliate
How to embed emerging risk identification and management IRMindia Affiliate
 
An Industry Overview: Enterprise Risk Services and Products
An Industry Overview: Enterprise Risk Services and ProductsAn Industry Overview: Enterprise Risk Services and Products
An Industry Overview: Enterprise Risk Services and Products
 
Advanced Risk Management - Elsam Management Consultants
Advanced Risk Management - Elsam Management ConsultantsAdvanced Risk Management - Elsam Management Consultants
Advanced Risk Management - Elsam Management Consultants
 
Hr erm-whitepaper
Hr erm-whitepaperHr erm-whitepaper
Hr erm-whitepaper
 
Risk Management Frameworks
Risk Management FrameworksRisk Management Frameworks
Risk Management Frameworks
 
View from the top. A board-level perspective of current business risks
View from the top. A board-level perspective of current business risksView from the top. A board-level perspective of current business risks
View from the top. A board-level perspective of current business risks
 
Holistic risk management
Holistic risk managementHolistic risk management
Holistic risk management
 
Enterprise risk magazine - IRM India Affiliate
Enterprise risk magazine - IRM India Affiliate Enterprise risk magazine - IRM India Affiliate
Enterprise risk magazine - IRM India Affiliate
 
The management of reputation risk and airline sustainability
The management of reputation risk and airline sustainabilityThe management of reputation risk and airline sustainability
The management of reputation risk and airline sustainability
 

Similar to IOD Convention 2017_Governance, Ethics and Sustainability_Marc Ronez

How to Hire a Great CRO
How to Hire a Great CROHow to Hire a Great CRO
How to Hire a Great CRO
The IRM India
 
What is RIMS Doing?
What is RIMS Doing?What is RIMS Doing?
FERMA presentation at the IIA Belgium Conference
FERMA presentation at the IIA Belgium ConferenceFERMA presentation at the IIA Belgium Conference
FERMA presentation at the IIA Belgium Conference
FERMA
 
FERMA presentation at Athens conference
FERMA presentation at Athens conferenceFERMA presentation at Athens conference
FERMA presentation at Athens conference
FERMA
 
2014.03.20 BDM Transport Insurance Seminar presentation
2014.03.20 BDM Transport Insurance Seminar presentation2014.03.20 BDM Transport Insurance Seminar presentation
2014.03.20 BDM Transport Insurance Seminar presentation
FERMA
 
Five lines of assurance a new paradigm in internal audit & erm
Five lines of assurance a new paradigm in internal audit & ermFive lines of assurance a new paradigm in internal audit & erm
Five lines of assurance a new paradigm in internal audit & erm
Dr. Zar Rdj
 
Five Lines of Assurance A New ERM and IA Paradigm
Five Lines of Assurance  A New ERM and IA ParadigmFive Lines of Assurance  A New ERM and IA Paradigm
Five Lines of Assurance A New ERM and IA Paradigm
Tim Leech
 
WMA Risk Survey 2016
WMA Risk Survey 2016WMA Risk Survey 2016
WMA Risk Survey 2016
Noelle Buckley
 
Chartered Accountant’s Role in an Enterprise Risk Management
Chartered Accountant’s Role in an Enterprise Risk ManagementChartered Accountant’s Role in an Enterprise Risk Management
Chartered Accountant’s Role in an Enterprise Risk Management
CA. (Dr.) Rajkumar Adukia
 
Implementing an Enterprise Risk Management program (2022 updates).pdf
Implementing an Enterprise Risk Management program (2022 updates).pdfImplementing an Enterprise Risk Management program (2022 updates).pdf
Implementing an Enterprise Risk Management program (2022 updates).pdf
Robert Serena, FSA, CFA, CPCU
 
Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2
Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2
Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2
Tim Leech
 
grc-today-oct-2015
grc-today-oct-2015grc-today-oct-2015
grc-today-oct-2015
Andrew Miller
 
I need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docxI need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docx
bkbk37
 
I need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docxI need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docx
4934bk
 
Risk Management - A Journey
Risk Management - A JourneyRisk Management - A Journey
Risk Management - A Journey
Debashis Gupta
 
C-Suite’s Guide to Enterprise Risk Management and Emerging Risks
C-Suite’s Guide to Enterprise Risk Management and Emerging RisksC-Suite’s Guide to Enterprise Risk Management and Emerging Risks
C-Suite’s Guide to Enterprise Risk Management and Emerging Risks
Aronson LLC
 
Ilta 2009 law firm risk management can it grow profitability - panel member...
Ilta 2009 law firm risk management   can it grow profitability - panel member...Ilta 2009 law firm risk management   can it grow profitability - panel member...
Ilta 2009 law firm risk management can it grow profitability - panel member...
David Cunningham
 
Julia graham@bdm2014
Julia graham@bdm2014Julia graham@bdm2014
Julia graham@bdm2014
bdm2014
 
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
ypytlik
 
Executive Summary on Leadership in Risk Management Webinar
Executive Summary on Leadership in Risk Management WebinarExecutive Summary on Leadership in Risk Management Webinar
Executive Summary on Leadership in Risk Management Webinar
FERMA
 

Similar to IOD Convention 2017_Governance, Ethics and Sustainability_Marc Ronez (20)

How to Hire a Great CRO
How to Hire a Great CROHow to Hire a Great CRO
How to Hire a Great CRO
 
What is RIMS Doing?
What is RIMS Doing?What is RIMS Doing?
What is RIMS Doing?
 
FERMA presentation at the IIA Belgium Conference
FERMA presentation at the IIA Belgium ConferenceFERMA presentation at the IIA Belgium Conference
FERMA presentation at the IIA Belgium Conference
 
FERMA presentation at Athens conference
FERMA presentation at Athens conferenceFERMA presentation at Athens conference
FERMA presentation at Athens conference
 
2014.03.20 BDM Transport Insurance Seminar presentation
2014.03.20 BDM Transport Insurance Seminar presentation2014.03.20 BDM Transport Insurance Seminar presentation
2014.03.20 BDM Transport Insurance Seminar presentation
 
Five lines of assurance a new paradigm in internal audit & erm
Five lines of assurance a new paradigm in internal audit & ermFive lines of assurance a new paradigm in internal audit & erm
Five lines of assurance a new paradigm in internal audit & erm
 
Five Lines of Assurance A New ERM and IA Paradigm
Five Lines of Assurance  A New ERM and IA ParadigmFive Lines of Assurance  A New ERM and IA Paradigm
Five Lines of Assurance A New ERM and IA Paradigm
 
WMA Risk Survey 2016
WMA Risk Survey 2016WMA Risk Survey 2016
WMA Risk Survey 2016
 
Chartered Accountant’s Role in an Enterprise Risk Management
Chartered Accountant’s Role in an Enterprise Risk ManagementChartered Accountant’s Role in an Enterprise Risk Management
Chartered Accountant’s Role in an Enterprise Risk Management
 
Implementing an Enterprise Risk Management program (2022 updates).pdf
Implementing an Enterprise Risk Management program (2022 updates).pdfImplementing an Enterprise Risk Management program (2022 updates).pdf
Implementing an Enterprise Risk Management program (2022 updates).pdf
 
Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2
Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2
Paradigm Paralysis in ERM & IA EB7_p48-51 Tim Leech v2
 
grc-today-oct-2015
grc-today-oct-2015grc-today-oct-2015
grc-today-oct-2015
 
I need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docxI need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docx
 
I need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docxI need a response to the discussion in APA format.docx
I need a response to the discussion in APA format.docx
 
Risk Management - A Journey
Risk Management - A JourneyRisk Management - A Journey
Risk Management - A Journey
 
C-Suite’s Guide to Enterprise Risk Management and Emerging Risks
C-Suite’s Guide to Enterprise Risk Management and Emerging RisksC-Suite’s Guide to Enterprise Risk Management and Emerging Risks
C-Suite’s Guide to Enterprise Risk Management and Emerging Risks
 
Ilta 2009 law firm risk management can it grow profitability - panel member...
Ilta 2009 law firm risk management   can it grow profitability - panel member...Ilta 2009 law firm risk management   can it grow profitability - panel member...
Ilta 2009 law firm risk management can it grow profitability - panel member...
 
Julia graham@bdm2014
Julia graham@bdm2014Julia graham@bdm2014
Julia graham@bdm2014
 
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
Yvonne I Pytlik Journal Of Securities Law, Regulation & Compliance April ...
 
Executive Summary on Leadership in Risk Management Webinar
Executive Summary on Leadership in Risk Management WebinarExecutive Summary on Leadership in Risk Management Webinar
Executive Summary on Leadership in Risk Management Webinar
 

Recently uploaded

Business storytelling: key ingredients to a story
Business storytelling: key ingredients to a storyBusiness storytelling: key ingredients to a story
Business storytelling: key ingredients to a story
Alexandra Fulford
 
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan ChartSatta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results
 
IMG_20240615_091110.pdf dpboss guessing
IMG_20240615_091110.pdf dpboss  guessingIMG_20240615_091110.pdf dpboss  guessing
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta MatkaDpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
➒➌➎➏➑➐➋➑➐➐Dpboss Matka Guessing Satta Matka Kalyan Chart Indian Matka
 
Part 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 SlowdownPart 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 Slowdown
jeffkluth1
 
Profiles of Iconic Fashion Personalities.pdf
Profiles of Iconic Fashion Personalities.pdfProfiles of Iconic Fashion Personalities.pdf
Profiles of Iconic Fashion Personalities.pdf
TTop Threads
 
TIMES BPO: Business Plan For Startup Industry
TIMES BPO: Business Plan For Startup IndustryTIMES BPO: Business Plan For Startup Industry
TIMES BPO: Business Plan For Startup Industry
timesbpobusiness
 
The Genesis of BriansClub.cm Famous Dark WEb Platform
The Genesis of BriansClub.cm Famous Dark WEb PlatformThe Genesis of BriansClub.cm Famous Dark WEb Platform
The Genesis of BriansClub.cm Famous Dark WEb Platform
SabaaSudozai
 
Best Competitive Marble Pricing in Dubai - ☎ 9928909666
Best Competitive Marble Pricing in Dubai - ☎ 9928909666Best Competitive Marble Pricing in Dubai - ☎ 9928909666
Best Competitive Marble Pricing in Dubai - ☎ 9928909666
Stone Art Hub
 
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...
my Pandit
 
The Steadfast and Reliable Bull: Taurus Zodiac Sign
The Steadfast and Reliable Bull: Taurus Zodiac SignThe Steadfast and Reliable Bull: Taurus Zodiac Sign
The Steadfast and Reliable Bull: Taurus Zodiac Sign
my Pandit
 
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Taste
Zodiac Signs and Food Preferences_ What Your Sign Says About Your TasteZodiac Signs and Food Preferences_ What Your Sign Says About Your Taste
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Taste
my Pandit
 
Industrial Tech SW: Category Renewal and Creation
Industrial Tech SW:  Category Renewal and CreationIndustrial Tech SW:  Category Renewal and Creation
Industrial Tech SW: Category Renewal and Creation
Christian Dahlen
 
Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024
Adnet Communications
 
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
taqyea
 
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan ChartSatta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results
 
Pitch Deck Teardown: Kinnect's $250k Angel deck
Pitch Deck Teardown: Kinnect's $250k Angel deckPitch Deck Teardown: Kinnect's $250k Angel deck
Pitch Deck Teardown: Kinnect's $250k Angel deck
HajeJanKamps
 
list of states and organizations .pdf
list of  states  and  organizations .pdflist of  states  and  organizations .pdf
list of states and organizations .pdf
Rbc Rbcua
 
AI Transformation Playbook: Thinking AI-First for Your Business
AI Transformation Playbook: Thinking AI-First for Your BusinessAI Transformation Playbook: Thinking AI-First for Your Business
AI Transformation Playbook: Thinking AI-First for Your Business
Arijit Dutta
 
Registered-Establishment-List-in-Uttarakhand-pdf.pdf
Registered-Establishment-List-in-Uttarakhand-pdf.pdfRegistered-Establishment-List-in-Uttarakhand-pdf.pdf
Registered-Establishment-List-in-Uttarakhand-pdf.pdf
dazzjoker
 

Recently uploaded (20)

Business storytelling: key ingredients to a story
Business storytelling: key ingredients to a storyBusiness storytelling: key ingredients to a story
Business storytelling: key ingredients to a story
 
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan ChartSatta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
 
IMG_20240615_091110.pdf dpboss guessing
IMG_20240615_091110.pdf dpboss  guessingIMG_20240615_091110.pdf dpboss  guessing
IMG_20240615_091110.pdf dpboss guessing
 
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta MatkaDpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
Dpboss Matka Guessing Satta Matta Matka Kalyan Chart Satta Matka
 
Part 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 SlowdownPart 2 Deep Dive: Navigating the 2024 Slowdown
Part 2 Deep Dive: Navigating the 2024 Slowdown
 
Profiles of Iconic Fashion Personalities.pdf
Profiles of Iconic Fashion Personalities.pdfProfiles of Iconic Fashion Personalities.pdf
Profiles of Iconic Fashion Personalities.pdf
 
TIMES BPO: Business Plan For Startup Industry
TIMES BPO: Business Plan For Startup IndustryTIMES BPO: Business Plan For Startup Industry
TIMES BPO: Business Plan For Startup Industry
 
The Genesis of BriansClub.cm Famous Dark WEb Platform
The Genesis of BriansClub.cm Famous Dark WEb PlatformThe Genesis of BriansClub.cm Famous Dark WEb Platform
The Genesis of BriansClub.cm Famous Dark WEb Platform
 
Best Competitive Marble Pricing in Dubai - ☎ 9928909666
Best Competitive Marble Pricing in Dubai - ☎ 9928909666Best Competitive Marble Pricing in Dubai - ☎ 9928909666
Best Competitive Marble Pricing in Dubai - ☎ 9928909666
 
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...
 
The Steadfast and Reliable Bull: Taurus Zodiac Sign
The Steadfast and Reliable Bull: Taurus Zodiac SignThe Steadfast and Reliable Bull: Taurus Zodiac Sign
The Steadfast and Reliable Bull: Taurus Zodiac Sign
 
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Taste
Zodiac Signs and Food Preferences_ What Your Sign Says About Your TasteZodiac Signs and Food Preferences_ What Your Sign Says About Your Taste
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Taste
 
Industrial Tech SW: Category Renewal and Creation
Industrial Tech SW:  Category Renewal and CreationIndustrial Tech SW:  Category Renewal and Creation
Industrial Tech SW: Category Renewal and Creation
 
Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024Lundin Gold Corporate Presentation - June 2024
Lundin Gold Corporate Presentation - June 2024
 
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
一比一原版新西兰奥塔哥大学毕业证(otago毕业证)如何办理
 
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan ChartSatta Matka Dpboss Kalyan Matka Results Kalyan Chart
Satta Matka Dpboss Kalyan Matka Results Kalyan Chart
 
Pitch Deck Teardown: Kinnect's $250k Angel deck
Pitch Deck Teardown: Kinnect's $250k Angel deckPitch Deck Teardown: Kinnect's $250k Angel deck
Pitch Deck Teardown: Kinnect's $250k Angel deck
 
list of states and organizations .pdf
list of  states  and  organizations .pdflist of  states  and  organizations .pdf
list of states and organizations .pdf
 
AI Transformation Playbook: Thinking AI-First for Your Business
AI Transformation Playbook: Thinking AI-First for Your BusinessAI Transformation Playbook: Thinking AI-First for Your Business
AI Transformation Playbook: Thinking AI-First for Your Business
 
Registered-Establishment-List-in-Uttarakhand-pdf.pdf
Registered-Establishment-List-in-Uttarakhand-pdf.pdfRegistered-Establishment-List-in-Uttarakhand-pdf.pdf
Registered-Establishment-List-in-Uttarakhand-pdf.pdf
 

IOD Convention 2017_Governance, Ethics and Sustainability_Marc Ronez

  • 1. ARiMI – Asia Risk Management Institute By MARC RONEZ Chief Risk Strategist & Knowledge Leader ARIMI – Asia Risk Management Institute NOTES IOD Global Convention 2017– Singapore, 14th December 2017 Board's Risk Management : Focus on Sustainability Issues and the Ethic Gap Challenge
  • 2. Agenda for this Session þ Shifting the focus of Management from SHORT-term profit to LONG-term sustainable performance þ Expanding the focus from Creating SHAREHOLDERS Value to Creating STAKEHOLDERS SHARED Value þ Supporting Risk & Performance Management SYSTEMS with a strong Risk Management CULTURE grounded on solid Ethical foundations Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 3
  • 3. Changes, Risks & Crises.. Can take many forms Terrorism Diseases Earthquake Pollution Bank run SubprimeExplosion NGO Attack Lawsuits Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 4
  • 4. With Disastrous Consequences: Corporate Scandals & FAILURES 9/11 Fukushima Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 5
  • 5. Root Causes for Organization's problems The investigations that followed each of these cases, and many others, revealed one COMMON element behind the institutions‘ troubles: The People’s Factor! Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 6
  • 7. 8 Lack of ETHICS will eventually impede Sustainability "It's only when the tide goes out that … you learn who's been swimming naked." Warren Buffett, Berkshire Hathaway Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
  • 8. Understanding Corporate Governance – Who are all the Parties involved in the Corporate "Game” ? Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 9 OWNERSHIP CONTROL Management (Agent) Shareholders (Principal) B.O.D - Board of Directors ? Any other Stakeholders that matter.. ?
  • 9. Agency Relationships and the Alignment Gap The Problem is… that human beings are inherently Self- centered & SELF INTERESTED … ..and hence in case of Conflict of Interests, … there is the possibility of opportunistic, self-interested behaviour on the part of the AGENT that works AGAINST the welfare of the PRINCIPAL and other Stakeholders. How could this Happen? 10Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
  • 10. Can you TRUST your Boss, staff, suppliers, customers, etc? The Agency Problem. 1.  Inherent Conflict of Interest: The interests of principal (shareholders) and agent (Management) will DIVERGE 2.  Lack of Control: With its delegation of authority, the agent can make the decisions he wants and it is difficult for the Principal to interfere and organize effective control. 3.  Lack of Transparency & Information asymmetry: The agent’s actions are HIDDEN from the principal or are costly to observe. The agent possesses information that is, for the principal unobservable or costly to obtain. 11Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
  • 11. Increased PRESURES on Resources, human communities & Environment 12Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 Business has been viewed increasingly as a major cause of Social, Environmental and Economic problems.
  • 12. Criticisms against Business Activities 13Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 Companies and their leaders are widely perceived to seek profits on the short-term for themselves at the expense of the broader community and futures generations.
  • 13. Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 14 If we destroy this one.. any Plan B?
  • 14. An OUTDATED model of value creation? In their pursuit of Short-term Financial Profits, Companies overlook : ­ the well-being of their customers, ­ the depletion of natural resources vital to their businesses, ­ the viability of key suppliers, ­ or the economic distress of the communities in which they produce and sell? ­ And other ethical issues 15Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
  • 15. You cannot be healthy in the long run if your value chain ecosystem is unhealthy Key Partners: (Supply Chain) Raw Materials, Goods & Services Competitors & New Entrants YOUR ORGANIZATION Key Partners: (Routes to Markets, Channels) Distributors, Complementors, Vendors, etc. Customers (Segments & Profiles) Prospectivecustomers Substitutes Source: Marc Ronez – Asia Risk Management Institute Who are your competitors and what is the intensity of the competition in your marketplace. How easy is it to enter your industry? Are there substitutes products /services that can answer the needs of your customer just as effectively? Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 16
  • 16. Corporate Governance & Social Responsibility: Aligning Stakeholders’ Rising & Diverging Interests Government & Regulators ORGANIZATION External Auditors Rating Agencies Customers Shareholders / Investors coverage and pressure groups scrutiny Decisions to invest or to hold its shares Regulatory Framework & control Competitors’ behaviors Lending funds & at what rate Partners /Suppliers Competitors Media / Public / Pressure Groups Lenders Management/ Employees Audit requirements Ratings requirements Needs met or not supply at what price productive or not Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 17
  • 17. Similarly the Objectives of the CODES of Corporate Governance is .. SUSTAINABILITY þ Control the impact of Greed, conflict of interest and Fraud þ Force accountability and responsibility by to executives þ Ensure information symmetry to truly gauge financial health of company and build transparency into processes þ Provide protection of investors, employees and other relevant stakeholders Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 18
  • 18. The Centrality of the ROLE of the Board of Directors Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 19
  • 19. New Codes of Corporate Governance put clearly the responsibility of Risk Management on the Board of Directors A number of aspects of ERM are closely aligned to the work of the board: þ  Determine Strategic approach to risk-taking and set risk appetite and policy þ  Establish organizational structure for risk management þ  Monitor the effectiveness of Risk Management Systems in Place, and þ  Establish ERM values and promote a Risk-Aware corporate culture þ  Monitor the Key Risks and anticipate on critical emerging challenges 20Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017
  • 20. How to Nuture Risk Aware & Ethical Behavior in your organization? Understanding the key factors of Unethical behaviors, it will help to: 1.  Set & monitor indicators of pressures on employees to engage in unethical actions and/or commit fraud through effective Performance Management Systems 2.  Reduce an individual’s ability to commit fraud and remain undetected for long periods through effective Governance & Controls systems 3.  Promote a more ethical and risk aware environment inside the organization Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 21
  • 21. A framework for Managing Ethical Risk & Building a Risk Aware Culture Code Conduct & Ethics Management Leadership Communication & Training Set clearly the principles & values to guide behaviors Top Management must lead by example Provide information, induction, training & mentorship EMBED in PROCESSES, SYSTEMS & CULTURE Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 Human Capital Cycle Management Hire, Reward & Promote the right employees HEALTHY SUSTAINABLE ORGANIZATION 22 Detection & Remediation Set appropriate, Resources Processes & Tools
  • 22. The Objective of Risk Management is that … .. an organisation takes risk KNOWINGLY and manage risk exposure INTELLIGENTLY .. in a controlled (or balanced) manner so that the business is viable for a longer term (SUSTAINABILITY) while meeting the expectation of all the relevant stakeholders by CREATING SHARED VALUE (i.e., shareholders, customers/policyholders, employees, regulators, rating agencies, suppliers, etc). Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 23
  • 23. Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 24 A recognized expert with more than 20 years of experience both as a practitioner & trainer for large MNCs, Governments & Charities. Areas of expertise include ERM, risk decision-making processes, Corporate Governance, Business Ethics, Social Responsibility, risk-aware culture, risk communication and crisis management, Business Model/Strategy Risk Management, corporate learning systems development. MBA from the University of Chicago Booth, an MSc in Insurance & a LLM from the University of La Sorbonne, Master Degree in Advance Business Research from UNISA – University of South Australia Marc has an MBA from the University of Chicago Booth GSB, MSc in Insurance from the Université De Paris I - Panthéon-Sorbonne, LL.M. from Université Panthéon-Assas (Paris II) and Master’s Degree in Advanced Business Practice from University of South Australia. He is a Fellow in Applied Risk Management (FARM) from the CARM Institute. ARiMI – Asia Risk Management Institute, ESSEC Business School Work Education
  • 24. What do I do? I help managers & leaders to use Risk Management to: þ RESOLVE difficult operational and business challenges þ TAKE & MANAGE risks effectively to build sustainable & profitable growth models Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 25
  • 25. Risk Management is a continuous journey, not a destination! Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 Marc Ronez is on Linkedin & WordPress You can find his profile & read his blogs at: P: www.linkedin.com/in/marc-ronez B: theriskmanagementparadox.com B: riskmanagementdemystified.com 26
  • 26. ARiMI – Asia Risk Management Institute Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 27
  • 27. 28 For more information on ARiMI, check our website at: www.arimi.org Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017 Developing Effective Leaders & Decision- makers for complex & volatile times
  • 28. Important Note: Please note that that this presentation and its contents, is the intellectual property of the Asia Risk Management Institute Pte Ltd. It has been prepared for this IOD conference 2017 event and it cannot be used for any other purposes without the specific written consent of the Asia Risk Management Institute. Whilst any third party information contained in this document has been obtained from sources believed to be reliable, no representations are made as to its accuracy or completeness. Further, ARiMI expressly disclaims any responsibility for liability or loss arising from use of such information or from any of ARiMI's comments upon it. 29Marc Ronez - Governance, Ethics & Risk Management - Copyright © ARiMI 2017