The sun rises the same way over New Zealand as it does in North America, but the way risk management is handled contrasts considerably between them. Andrew Bent has learned as much in his total eleven years of risk management, roughly six of which were spent in New Zealand before coming to North America. He writes for Risk Management Magazine about how style differs between nations and what can be done to redefine the role of risk manager for the better.
In what Bent colorfully describes as the “Antipodean Approach” of New Zealand, people are hired according to skills over education, and job titles are seldom flung around. People from various disciplines in an organization are expected to come together to address the potential risks of each discipline together, creating an overarching risk strategy. In North America by comparison, often lawyers look after legal risks, accountants look after financial risks, and engineers look after operational risks with no swapping of notes ever occurring between them. Bent provides a terrific image of why this can be a problem:
The trouble with this approach is that it can also break down organizational cohesiveness and, ultimately, lead to organizational failure — despite the risks within each silo being managed to the required standard. Managing an organization’s risks in individual silos is like trying to pick up a six-pack without the little plastic thingy that holds them all together; you can do it, but it is far harder than it would be if the cans were connected to each other.
He does not mean to undercut the value of education when he praises the New Zealand system though. If education is the only reasonable means to acquire the skills to do a job, then that education is needed. However, sometimes determining what skills a job requires is a question in itself. In traditional insurance and risk-transfer functions, people coming from business and finance backgrounds will suffice, but when the risk management function involves working across the full spectrum of risks, a skill reevaluation may be necessary.
Bent favors this multidisciplinary approach because it means more people will be invited to become risk managers based on skill sets they already possess, even if their prior work experience does not say in specific words that they were involved in “risk management.” New people with applicable skills entering from different backgrounds means the introduction of new, helpful perspectives in the organization, with Bent himself being an example. When organizations become open-minded in their hiring and structuring of risk management, the new risk managers who emerge will represent a fresh diversity of ideas that you never realized you needed.