1. Risk management approach in new risk trends – Risk Advisory and Root Cause Analysis
M Khumalo

2. Changing Risk Management Value Proposition
To protect and enhance institutional value by mitigating against threats to organizational performance whilst leveraging on opportunities.
Traditional value add – minimizing wastages, proactively identifying threats to institutional performance, ensuring compliance and avoiding penalties and fees.
Modern and current trends – enhancing institutional performance through robust strategy formulation, proactive management of downturns in performance and optimizing opportunities.
(Enterprise) RM plays an even deeper role in serving as a linkage to different strategic points within the organization.
RM also plays a critical role in enhancing stakeholder value – stakeholders more interested in how the organizations goes about implementing its strategy.
Further linkages to other disciplines such as governance, compliance, ethics and integrity management.
Changing Risk Management Value Proposition

3. Risk Assurance failure – Lessons for new risk approaches
Lack of risk governance
Poor engagement by various assurance providers
Management overriding control environment
Blurred lines of defense model
Changing business environment
Dealing with symptoms vs. root cause

4. Weaknesses in risk management across different levels of assurance
Slow or non-response in addressing poor controls – mitigation strategies not implemented > 3 years
Overriding of controls
Poor accountability
Legal vs. Risk Assurance
Risk Management
Removed from business operations (by design and ability)
Risks not aligned to critical business processes
compliance function – Compliance risk management?
Internal Audit
Limited value to management
Limited advisory services
External Assurance Providers
Removed from operations
Reactive
Focus on audit vs risk
Diminished Influence
Weaknesses in risk management across different levels of assurance

5. Collective responsibility and accountability – Combined Assurance vs
Collective responsibility and accountability – Combined Assurance vs. Integrated Assurance
Champion for Combined Assurance
Greater management responsibility for risk management
Internal Audit and Risk Management reporting protocol
Skillset for Risk Committee
Closer linkages between MPAC, Internal Audit, Risk Management and Audit Committee
Advisory services vs. Policing?
Root Cause Analysis (RCA)
Shift of paradigm

6. Risk Management and Influence on Strategy
Understanding key strategic inputs of the organization – wider focus beyond the normal finances, human resources – appreciation of the environment: right strategy for the right people at the right time.
Institutional performance is a function of various organizational processes - Optimizing key institutional processes should be part of the organizational strategy formulation programme – risk management is a key influencer in this.
Defining the performance measures and reporting means is as important – can have the right strategy but measure incorrectly – measure the right things right
Defined outcomes and impact measures –
many organizations measure process and output
Risk Management and Influence on Strategy

7. Root Cause Analysis in Risk Management – RIMS Model
External Causes
People/Internal Personnel Causes
Process/Operational Causes
Relationship Causes
Systems/Physical Causes
Root Cause Analysis in Risk Management – RIMS Model

8. Measuring Risk at various source – Reiterative Process
Ripple effect of risk
Appetite and Tolerance determined at each level
Key Risk Indicators to measure risk at source
Risk Management Monitoring to compliance performance monitoring (individual and organizational)
Measuring Risk at various source – Reiterative Process

9. Thank you