An Executive eye on Risk Management

As McKinsey observes: “Many of the costliest risk and integrity failures have cultural weaknesses at their core”. Post-pandemic, as new ways of working evolve, it remains to be seen if culture will be weakened to the point where it increases operational risk. Most companies are already assessing what the new normal means for every aspect of their operations, including how they effectively manage risk. In the old world, before remote working patterns had been a regular feature, teams had the opportunity to interact face-to-face on a regular basis, taking advantage of moments from lunchtime strolls to water cooler chats and elevator pitches. Executives had frequent opportunity to get ‘a feel of how things smell and work around here’.

In the maritime sector, it is now clear that ‘the office’, for many, will become as remote as the ship always has been. Whilst technical experts become less likely required to live in commutable range from HQ, it remains critical that their business leaders connect to these men and women that manage their biggest risks, and be assured that the corporate operating culture permeates all the way to the front line. Ironically, as these leaders become ever more consumed in balancing expectations of shareholders and society with the demands from government and regulators; time to do so is getting scarcer.

The risk management process of identifying, mitigating, accepting, or avoiding risks is one that continues to evolve on the back of operational experience, learnings (often the hard way!) and academic research. In light of the evolving new normal, and relative detachment between Execs and front line decision-makers, an episodic approach to reviewing risk management feels outdated. Stonefort marine consultancy supports a more agile, purposeful and objective approach to managing risk. Whilst we believe that delegation builds trust and develops capable future leaders, we equally believe a business leader’s calendar that gives time to test integrity, assess commitment and culture at the coalface is the prudent hedge. Ideally, operationally experienced leaders need to do this directly, with empathy, and in a language that the real managers of day-to-day risk understand. Without such an approach, how can their signatures be applied confidently to documents that assure shareholders that the costliest risks are being robustly managed?

Alternatively, Executives can bring in experts such as Stonefort marine consultancy who have worked at, and remain credible from the front line through to the boardroom. We bring decades of industry experience right across the maritime sector and have deep knowledge of all levels of risk management processes. We are encouraged by increasing demand for our services from organisations who understand that the cost of getting it wrong is not an option.