“The unimaginable must now be imagined…”

At the inaugural session of the “Risk Governance Forum”, Gerald Lincoln, Country Managing Partner of EY Mauritius, delivered a speech that emphasised the need for organisations to rethink their approach to risk in an era where unpredictability and uncertainty are the new norms.

Mr. Lincoln began by acknowledging the heightened level of uncertainty that businesses face today, stating that “the world seems more and more volatile, and the unimaginable must now be imagined. Nothing can be taken for granted anymore.” He pointed out that the assumptions we once relied upon in business are no longer reliable, citing examples like unexpected employee resignations, supplier bankruptcies, market disruptions, and even incidents of airline safety.

This climate of unpredictability, Mr. Lincoln explained, demands a shift in mind-set. Traditional risk management models that focus primarily on predictable outcomes are inadequate. “While we can anticipate some risks, allowing for strategic foresight and planning, other risks defy traditional thinking. These unpredictable events, often called ‘black swan events’, are rare and unforeseen, but can have catastrophic implications,” he said.

Using the recent COVID-19 pandemic as a stark example, Mr. Lincoln highlighted how organisations with mature risk management mind-sets were able to navigate the crisis more effectively. He stressed the importance of preparedness, noting that those businesses that were ready for the unpredictable emerged from the pandemic with fewer scars. This preparedness, according to him, transforms risk management from a ‘nice-to-have’ to a ‘must-have’, enabling organisations to respond quickly and decisively when confronted with unexpected challenges.

While we can anticipate some risks, allowing for strategic foresight and planning, other risks defy traditional thinking.

Mr. Lincoln emphasised that risk management should not be seen as a separate or stand-alone function, but rather as an integral part of an organisation’s strategic execution, stating that “with effective risk management, businesses increase the likelihood of achieving their strategic objectives. Risk cannot be divorced from strategic execution.”

Organisations that embed risk management into their day-to-day operations and decision-making are better positioned to capitalise on opportunities and mitigate threats. This integration, Mr. Lincoln noted, requires a comprehensive approach that involves people, methods, and tools. He therefore advocated for regular training and awareness sessions to ensure that everyone in the organisation understands risk and their role in mitigating it. Assigning ownership and accountability for risk is also crucial.

Regarding methods, Mr. Lincoln recommended using a common and simple risk language to ensure that everyone understands the approach to risk management. Comprehensive frameworks and policies should be implemented to provide alignment. Finally, he suggested that organisations consider implementing tools to monitor risk effectively, from simple dashboards to more advanced governance, risk, and compliance systems.

As part of the Risk Governance Forum, EY Mauritius is committed to supporting the advancement of risk management practices. Mr. Lincoln expressed enthusiasm for the journey ahead, stating, “We look forward to debating key risk management topics and sharing leading practices and insights gathered from our clients, both local and international, with you.”

The success of this initiative, he concluded, depends on the active participation and engagement of all stakeholders. He therefore encouraged attendees to take part in the various initiatives that EY and MIoD will be launching to foster a culture of effective risk management in Mauritius and beyond.