Risks are threats that are yet to become issues. With new technologies empowering customers, neglecting risks can affect your company’s brand value too. Facebook learned it the hard way. In this article at InformationWeek, John Edwards shared the views of Steven Minsky, the CEO of enterprise risk management software provider LogicManager, in this regard.
Playing with Risks
Minsky, the author of “The State of Risk Management in 2018,” opines that companies are experiencing a “see-through economy.” New technologies bring transparency to the operational capabilities of a company. This also empowers customers and stakeholders to raise questions whenever they suspect a foul play. Instead of waving these misdeeds off as mistakes, they label the company as a repeat offender that put their confidential data at risk. The immediate after-effects are a blow to the brand value and a decline in customer loyalty. Once the market value decreases, it takes longer to get back up. So, it has become necessary for business leaders to communicate more across the organization.
Integrating Risk Management Across Organization
To avoid contingencies, organizations must integrate risk management in all departments. However, that is the biggest challenge leaders are facing today, as per Minsky. A LogicManager survey reveals that 54 percent of risk management executives find cross-functional information management as a major governance problem. 87 percent, nevertheless, want to include governance in their risk management agenda within the next two years. With effective risk control, incidents like Chipotle’s food contamination and Wells Fargo’s loss of millions of customer information can be avoided.
Risks Related to Cybersecurity
72 percent of the respondents find cybersecurity as another key concern. Minsky reveals that in 2017 alone 1,579 data breaches in company accounts like Uber, Equifax, Wells Fargo, etc. exposed 178 million U.S. citizens to hackers. So, organizations must take measures to protect their users, employees, and stakeholders by reducing risks. They must create a plan before the crises hit them. He advises not to equate cybersecurity with outdated technologies. Moreover, most of the breaches happen due to inefficient security standards, employee ignorance or negligence, and poor governance.
Majority of leaders feel that being transparent is detrimental to their business growth. However, Minsky thinks organizations should take a “risk-based approach.” It involves going to the source of the risks and mitigating them beforehand. In a transparent economy, leaders must make their strategic moves keeping the reactions of customers and stakeholders in mind.
To view the original article in full, visit the following link: https://www.informationweek.com/strategic-cio/security-and-risk-strategy/transparency-reshaping-the-risk-management-landscape–/a/d-id/1331645