Page 22 - Risk Management Bulletin February 2024

RMAI BULLETIN FEBRUARY 2024

for years, yet there was still uncertainty and a lack making to navigate changing circumstances suc-
of preparedness when it actually occurred. cessfully.

f) Uncontrollable: Emerging risks often originate ex- d) Respond to Opportunities: Resilience goes be-
ternally to an organization and are beyond direct yond mere survival. It empowers organizations to
control. Rather than trying to control them, orga- recognize and respond to opportunities that arise
nizations need to adapt and respond to mitigate amid uncertainty. By leveraging their adaptive
the impact. With COVID-19, organizations had to capabilities, organizations can seize favourable cir-
adapt their working practices and environments to cumstances, make informed decisions, and capi-
navigate the challenges posed by the pandemic. talize on emerging trends.
g) Volatile: This refers to significant and rapid
changes in the risk within a short period. During In summary, tackling emerging risks through resilience
the COVID-19 pandemic in 2020, there were dras- empowers organizations to anticipate, prepare for,
tic shifts in daily life. For example, in India, life was withstand, recover from, and adapt to adverse events
while enabling them to respond to opportunities with
relatively normal in the early months but quickly
changed with the implementation of a nationwide confidence and agility.
lockdown in March.
Why do organisations avoid tackling emerg-
Understanding these characteristics of emerging risks, ing risks?
including their ambiguity, complexity, and volatility, is Emerging risks are indeed risks, and the conventional
crucial for effectively managing and responding to risk management processes continue to be applicable.
them, as demonstrated by the ongoing challenges However, quantifying the likelihoods and impacts of
posed by the COVID-19 pandemic. emerging risks with certainty often proves to be chal-
lenging. The ambiguous nature of these risks, coupled
Tackling Emerging Risks: - with a lack of available information, makes timely de-
Tackling emerging risks is vital for organizations to cision-making difficult.
cultivate resilience and navigate uncertain circum-
stances successfully. Unlike traditional risk manage- Historically, many charities have tended to side-line
ment, which primarily aims to support organizational emerging risks, categorizing them as too complex to
objectives and plans, resilience empowers organiza- address. This is primarily because these risks typically
tions to: fall into the category of low likelihood but high impact,
a) Anticipate and Prepare: Resilience allows organi- which may not align with the short-term objectives
zations to foresee potential adverse scenarios or that organizations often prioritize.
events, enabling them to proactively prepare for
Moreover, if senior management or the board lacks
and mitigate their impacts. This includes develop-
ing contingency plans, implementing risk mitiga- experience in strategic planning or risk discussions,
addressing emerging risks becomes even more chal-
tion strategies, and fostering adaptive capacities.
lenging. Additionally, there is a constant pressure on
b) Withstand and Recover: Resilience equips orga-
leadership time, leading to a tendency to focus only
nizations to withstand and absorb the impacts of
on immediate issues where more information is readily
adverse events. By building robust systems, struc-
available. This behavior of prioritizing current issues is
tures, and processes, organizations can bounce
ingrained and can be seen in the adaptation to Gen-
back more effectively from disruptions and re- eral Data Protection regulations as well.
cover from the effects of unexpected challenges.
c) Adapt to Changing Conditions: Resilience enables It is crucial for organizations to recognize the inherent
organizations to adapt to evolving conditions and challenges associated with emerging risks, including
environments. By embracing flexibility and em- the need to go beyond short-term objectives and al-
bracing a proactive mindset, organizations can locate sufficient time and resources for strategic plan-
adjust their strategies, operations, and decision- ning and risk management. By adopting a forward-

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