What are the most common collaboration challenges in Risk Management?

In my opinion the following are the most common challenges: 1. Poor leadership. 2. Lack of unity around goals. 3. Poor engagement among team members. 4. Miscommunication and poor flow of information. 5. Egos and lack of IQ. 6. Lack or absence risk culture

In my experience, diverse cultural perspectives within a risk management team enrich the overall approach to risk management, rather than acting as an obstacle. Different cultural insights can lead to more robust and comprehensive risk assessments. Also, time zone differences, rather than being a barrier, can be leveraged as an advantage. They allow for a 24-hour coverage of risk monitoring, ensuring that risks are continuously overseen across various global markets. This approach turns potential challenges into valuable assets for effective risk management.

O risco é inerente a qualquer atividade na vida pessoal, profissional ou nas organizações e pode envolver perdas, bem como oportunidades. Em finanças, a relação risco-retorno indica que, quanto maior o nível de risco aceito, maior o retorno esperado dos investimentos. O risco tanto é uma propriedade objetiva de um evento ou atividade, relativa à probabilidade de ocorrência de um evento adverso bem definido, como também é uma construção social e cultural. Aqui fica um questionamento, tendo em vista que muitos gestores e administradores demonstram, no dia a dia de seus negócios, um total desprezo ao gerenciamento dos riscos, pois visam somente aos resultados, sem entender os processos internos, por isso a importância dos controles internos.

In Risk Management, communication challenges often stem from complex jargon, differing risk perceptions, and siloed information. Addressing these, an out-of-the-box approach involves implementing a visual risk mapping system that uses intuitive graphics to convey complex data. Additionally, fostering a culture of open dialogue through regular cross-functional workshops and clear, concise documentation aids in overcoming communication barriers. Emphasizing a shared risk vocabulary and leveraging technology for real-time updates fosters collaboration, ensuring a comprehensive understanding of risks across all stakeholders.

As a basis,it is important to align understanding around risk management approach due to differences in background and experience. But I suggest to embrace diversity as a strength, to encourage the exchange of ideas and experiences to create a robust risk management framework that considers a broad spectrum of potential challenges.

In order to meet the stakeholder expectations, you must be able to identify who the proper stakeholders are for each project. This requires you to understand what aspects downstream and upstream will be affected. Meetings between the project team members is a great way of getting the right stakeholders involved. Some questions to answer are as follows (not an all-inclusive list): 1. Who will be involved in the project directly or indirectly? 2. Who are the suppliers? 3. Who might be affected by the project’s outcome? 4. Are there internal or external stakeholders? The stakeholders must be included in the planning stages to agree on the deliverables. Ultimately, a project’s success depends on the satisfaction of the stakeholders.

Stakeholder expectations is important to know. This is information that is used to understand how to formulate a proper risk management process. The concept is not to please every single stakeholder, but to go with a plan that achieves the overall objective. Which perspective positively impacts the risk management process, while ensuring productivity is maintained. Expectations change, and it is important to have regular feedback sessions, to ensure everyone remains focused on the same objectives.

O risco está associado às leis de probabilidade, fatos novos ou inesperados podem ocorrer sempre. O risco tem de ser algo possível. Citamos como exemplo a possibilidade de um avião cair ou a ocorrência de uma pandemia, depende mito de como avaliamos e entendemos as possibilidades dos riscos corporativos e operacionais. Aproveitando a ocasião desta nova edição, gostaria de mencionar o livro A lógica do Cisne Negro, de Nicholas Nassim Taleb, que aborda, por exemplo, a questão da aleatoriedade de eventos, por isso ele denomina acontecimentos improváveis como Cisnes Negros.

Often, what one individual or group identifies as a top risk for themselves may not be a top risk for the enterprise. Bringing those folks along on the journey to mitigate risks they may not initially view as paramount is a craft. Understanding how diverse stakeholders work together and communicating how they may benefit from addressing risks they didn't necessarily identify goes a long way to getting everyone on board. Increasing shared understanding and ownership of risks increases the likelihood of smooth(er) sailing when it comes to addressing those risks.

Clear communication to the right audience is the key for stakeholder management. Details and rationale behind any action with proper deadline to be communicated. Impact of missing the deadline also to be highlighted.

Em todos os processos de implementação de sistemas de controles internos, sempre existe o questionamento sobre a necessidade de implementá-los ou não. Acredito que, em muitos casos, seja mais pelo desconhecimento, ou até pela negligência nas responsabilidades, mas não é possível alegar ignorância da necessidade de ter controles mais efetivos que deem suporte à gestão.

The most important communication aspect of a risk management team is to ensure a high degree of psychological safety, allowing for a blame-free environment. Such an environment enables team members to talk openly about their mistakes and challenges and assist one another in times of operational stress. The lack of such an environment will cause team members to avoid discussing (and learning from) mistakes, avoid taking responsibility/ownership and will lead to a toxic culture that represses growth.

Team dynamics often face challenges such as divergent risk tolerance, unclear roles, and misalignment of goals. To address this, an out-of-the-box approach involves creating a dynamic risk-response task force with members from diverse backgrounds. Utilizing gamification techniques in risk workshops promotes engagement and encourages creative problem-solving. Regular team-building activities, coupled with transparent communication channels, help foster a culture of trust and collaboration, enabling teams to collectively navigate and mitigate risks more effectively.

Gaining the trust of stakeholders is critical, because they know their job better than you. 1) Gain formal approval from senior management, i.e., their managers. 2) Have meetings with agenda sent out one day in advance 3) Ask questions about the role they play. 4) Confirm your understanding with them at the end of the meeting 5) Thank them for their time

Managing a team may be easier if all members will be able to know from the very beginning which are the final scope of a project and how each of their competences can contribute to that. There are people good in creation (the artists), others are good in fix and follow the deadlines (the referees) and others that need you give them the tasks little by little (the soldiers) and so on. You, as a leader, have to be aware of all the differences in your team and let them work together considering their skills.

O controle interno pode ter custo, sim, mas esse custo dependerá do modo como o controle é realizado; quanto mais próximo da gestão, mais fácil será a maneira de justificar a sua implementação. É possível implementar um sistema de controles internos com os recursos existentes. Podemos dizer sem medo de errar que sim; contudo, devemos pelo menos conhecê-los. Para isso, basta identificar as fragilidades nos processos e aplicar alguns controles compatíveis com a necessidade.

Limited resources may result in a shortage of skilled professionals with expertise in risk management. This can lead to gaps in identifying, assessing, and mitigating complex financial risks effectively. Additionally, insufficient financial resources may restrict investments in advanced technologies needed for real-time risk monitoring, data analytics, and modeling. Outdated systems can hinder the ability to respond promptly to changing market conditions. Finally, meeting regulatory requirements often demands dedicated resources for monitoring, reporting, and ensuring compliance. Resource constraints may lead to challenges in keeping up with evolving regulatory landscapes.

Resource constraints in risk management functions is an ongoing challenge as they are seen as a ‘cost’ to the business. This can impact the independence of the risk management function and if under resourced could result in a breach of regulations or other non-compliance. Instead emphasis should be placed on appropriately resourcing risk management functions as this enables safer and quicker on-boarding of customers or processing of sales/transactions, and reduces the likelihood of regulatory fines. In the long run this not only benefits risk management but has a positive impact on the bottom line.

Na maioria das organizações, basta identificar o fluxo das operações e colocar alguns pontos de verificação e checagem, como aprovações, autorizações, relatórios, registros, prestação de contas e o monitoramento periódico de transações, mas não é tão simples assim. Para controlar, necessitamos entender ; por isso, sempre que possível, sugerimos o mapeamento de processos operacionais, que facilita demais a gestão de qualquer negócio.

A culture that prioritizes short-term gains over long-term stability can encourage risky behaviors. This short-sighted approach may result in overlooking potential long-term consequences and systemic risks in financial markets. Incentive structures that disproportionately reward risk-taking without considering risk mitigation efforts can encourage excessive risk-taking behaviors. This may lead to a culture where individuals prioritize personal gains over the organization's long-term stability. On the other hand, a risk-averse culture may resist necessary changes or adaptations in response to evolving market conditions. This resistance can impede the organization's ability to stay ahead of emerging risks and regulatory changes.

In fostering a robust risk culture, one major factor is, transparency. Every organization should encourage open communication about risks at all levels of the organization. This will help in creating an environment where employees feel empowered to report concerns without fear of reprisal. Establishing a shared understanding of risk appetite and tolerance ensures a collective commitment to risk management, mitigating the common challenge of siloed perspectives on risk within an organization.

Embracing a proactive risk optimization structure is the key to overcoming a negative risk culture. A good risk culture embraces horizontal and vertical integration of risk and risk ownership. It also educates risk as optimization of opportunities and mitigation of threats, while also instilling the role of the risk director/manager/department as the diplomat who helps achieve that optimization across the enterprise.

Muitas empresas aplicam a gestão de riscos sem antes realizar uma prévia imersão de toda a empresa no tema. Isso acaba ocasionando retornos indesejados, e entendimentos equivocados, causando perda de tempo, estresse e trabalhos sem geração de valor. O aculturamento constante é necessário e imprescindível.

It starts and ends with leadership When leaders set clear expectations and standards that include transparency and collaboration and lead by example great risk management occurs: - listening, - asking the right questions , - demanding and personally demonstrating adherence to the values they preach, - firing people who produce good results but who don’t share values; - demanding and leading conversation about risk management so that individuals see collaboration in action and modeled by leaders

Actually the collaboration challenge arises from unclear or inadequate understanding of role play of risk department. Business views risk policies and covenants to be impediments in the way of business development, whereas the right perspective is that the risk management or risk mitigation to be precise, is not the sole responsibility of risk department but all the other stakeholders viz business and Ops. Once this realisation dawns, collaboration is healthy bereft of any challenge whatsoever.

This covers most of the pointers. Just to summarize.. Common collaboration challenges in risk management include communication gaps, varying risk perceptions among team members, difficulty in aligning risk priorities, and coordinating actions across different departments or stakeholders. Additionally, inadequate sharing of information and a lack of a unified risk management strategy can impede effective collaboration in addressing and mitigating risks.

Common Framework. A shared framework to define crucial milestones, KPIs, among other activities, is critical for geographical disperse teams. Once I joined a company where a product launch plan was structured around the concept of 'D-Day.' However, various teams attributed different meanings to 'D-Day,' including: 1) Product clearance from Customs 2) Product arrival at the Point of Sale (POS) 3) Launch of the marketing campaign. Failure to detect this misalignment in a timely manner could have led to substantial monetary losses as well as it might have resulted in a loss of product momentum. Imagine excited customers heading to the POS after an aggressive marketing campaign, to discover they are uncertain on the product availability...

Common collaboration challenges in Risk Management include disparate data sources and lack of real-time information. An innovative approach involves implementing artificial intelligence algorithms for predictive risk modeling, enabling proactive risk mitigation. Utilizing blockchain technology ensures data integrity and transparency, fostering trust among collaborators. Additionally, integrating virtual reality simulations for risk scenarios enhances decision-making skills. This combination of advanced technologies promotes a more agile and informed collaborative risk management process, addressing traditional challenges with cutting-edge solutions.