Not surprisingly, the effects of the current economic recession on risk and risk management dominated the agenda. Managing change is a daily necessity in the crisis.

Not surprisingly, the effects of the current economic recession on risk and risk management dominated the agenda at this discussion in May. Some participants were concerned that governments were fighting the recession with the weapons that had caused it – notably making ‘cheap’ money available to encourage spending and stimulate recovery.

However, there was general agreement that this particular risk event has an upside for companies that are well capitalised, in that they can gain a competitive advantage over their less well capitalised or more risk averse peers in terms of acquisitions and expansion into new areas. For others, sensible cost cutting seems to be the answer for survival, provided it can be done in a way that does not jeopardise the future of the business.

Opinion was divided as to whether more regulation was the answer to preventing the kind of actions that led to the recession in the first place. The downside of more stringent regulation is that it can over-burden SMEs, who make a very significant contribution to most

European countries’ economies. But all participants agreed that good management and their improved understanding of risks were key in helping businesses not simply to recover but also to recover in a way that would leave them fitter to take advantage of post-recession opportunities. In terms of the risk manager’s role, this means communicating the right information at board level.

There was concern that governments are bailing out large organisations at the expense of SMEs – and more concern too that whistle blowing does not reap its just rewards. ‘Nobody likes the bad guy complaining about the risks,’ said one participant.

At a time when public confidence is key to an organisation’s survival, the media also came in for some criticism. Is the power of the press too great? And could its focus on the next ‘sexy’ risk issue encourage companies to ignore historic risks, even though they have not lessened in importance? A long-term perspective remains valid.

Managing change is a daily necessity in the crisis and, for organisations to do this effectively, risk managers need the ear of their senior management. ‘Trying to discuss the downside is still an issue,’ said one participant. Companies also need to be flexible and willing to divert resources to exploit new and potentially lucrative areas – provided that they have people who understand these new markets. The meeting concluded with a discussion of the insurance market and the likely effects of the current economic climate on future premium rates.