IRM’s risk predictions 2022 highlights five areas for boards to focus on: geopolitics, inflation, post-pandemic recovery, workforce and environmental, social and governance (ESG) issues.
“One of the challenging things about these risks is that they play out over multiple time-scales,” Stephen Sidebottom, IRM chair wrote in the introduction to the report. “All boards and executive teams have to balance things that are urgent against things that are important.”
He noted that few risk managers would have experience of dealing with inflation or the risks it poses. In addition to the potential failure of dealing with people in the workforce as businesses seek for a new normal, he said ESG must move centre stage.
“2022 has to be the year boards recognise the consequences of ESG failures as an existential risk for most major companies,” he said.
The report represents the views of IRM’s risk interest groups across a range of disciplines. For example, Isaac Alfon and Justin Elkins of IRM’s Insurance Group, consider the so-called great resignation. As older, more experienced staff leave the workforce, how will businesses cope? “Risk managers will need to evaluate whether the business, including the risk function, has the skills and capabilities needed to deliver in 2022,” they said.
In addition, Sarah Gordon IRMCert, of the IRM Innovation Group, said that digital and physical spaces needed to be better integrated.
“We expect an increase in hybridisation within organisations,” she said. “New technologies must and will be created, developed, and legitimised in these spaces as the interface between humans and machines shrink further.”
The report covers many specialist risk management disciplines, from climate change, construction and cyber to energy, environment and financial services. In addition, it provides a global view from South Africa, India, the Kingdoms of Saudi Arabia and the United States of America.
While businesses have rightly focused on resilience for much of 2020 and 2021, Michael Rasmussen, CMIRM, IRM Global Ambassador in the United States, warned that this will not be enough in 2022. They will need to become more agile too.
“Organisations in 2022 need to be agile organisations to avoid and prevent events,” he said, “but we also need agility to seize on opportunities and reliably achieve (or exceed) objectives.”
The most successful would also need to become creative in the way they managed risk, he added.