IIA INC Article shared by Ms. Anuja Ramdasi - My Comments

At the very outset, I thank Anuja Madam for sharing the thought provoking Article. I am trying to share my views w.r.t the publication with the Network on which we can delve/exchange views.

 1. In my opinion, when we consider risk assessment as a process, empirical evidence and analytical response to the same takes the centre stage. It is needless to say, these are predictive risks and /or foreseeing future/emerging risks identification.

2. Things which never foreseen earlier and appeared as ‘bolt from the blue’ are of course out of risk identification process radar at the first go e.g COVID Pandemic. However, knee jerk mitigation plans are there and also emerging, to arrest the spread and consequential losses.

3. In common parlance, risk is carrying a negative meaning while the same is not true. Risk and Opportunity are the two sides of the same coin and at times risk to one comes as opportunity to other. As for example, for the Pharma Companies by coming out with a Vaccine for COVID 19, will unlock opportunity for few billion dollar addition to Revenue in the otherwise sluggish market. Even WFH created a good market for IT Companies/Products.

4. “Prospects for a COVID-19 vaccine, its potential timing, and how it could impact your company/market “Quoted from the Article. How the same can be treated as “RISK“. Rather it has a causal relationship, and positive outcome on COVID 19 Vaccine (no negative meaning attached with it).

5. “Prospects for renewed/extended COVID lockdowns in your region/market that will continue to disrupt or re-disrupt continuity of your business operations”. Again these are the impacts of COVID 19. Of course an ‘’ action plan’’ orientation is there i.e how to thwart the disruptions for the survival of the entity and overall business scenario. Truly it is mitigation plan for the outcome against unprecedented ‘COVID 19’.

6. ” Economic forecasts, macroeconomic as well as those facing your industry”. A Part of it is based on data based (mentioned in 1 above) and the other one is opinion based forecasting keeping in view of the prevalent scenario. An inaccurate forecasting can be the road to doom. Forecasting, prediction etc. forms part of risk management not ‘risk management’ by itself.

7. “Prospects for additional government stimulus and any provisions that would benefit your organization/sector.” I am not at all clear about the ‘’Risk Management’’ in this parlance. The question comes to my mind, if the Industry/ entity is already selected as a beneficiary of Govt. bounty for COVID 19, then timing of inflow matters. If getting selection is a challenge, then the same can’t be construed as risk. Mitigation plan can be made for alternate source of fund which is event based (due to no inflow of Govt.Fund) with challenge on business continuity for income stream.

8. While agreeing to the chance of recurrence of COVID and threat of business disruptions, the business scenario going to be changed. Increase in health maintenance cost, reduction in office maintenance are few outcomes. 

9. Geopolitical developments and the potential for extended international travel restrictions is an outcome of COVID 19.Revenue stream of travel companies is badly impacted/going to impacted more, which again related to the unforeseen event of COVID 19, the unknown event not at all forming part of Risk Radar.

Now coming to the moot question – the role of IA in this regard. When no one guessed the event called COVID 19, how the IA can predict and include in ‘risk radar’? i.e so called risk metrics. Business sense of IA Team is the key even in making a mitigation plan of any Risk identified by business nay of COVID or similar event.