Fatal Mistakes Most Risk Consultants Make
The demand for risk management consultants is also rising. Unfortunately, not all risk consultants are able to generate value for their clients
Following the 1997 and 2008 economic crises, companies began to take enterprise risk management seriously and began migrating from their past reactive risk management practices towards more proactive ERM approaches.
As more and more businesses across the globe are looking to implement robust risk management, the demand for risk management consultants is also rising. Unfortunately, not all risk consultants are able to generate value for their clients.
There have been numerous discussions both within our certification programs as well as in private discussions between our members and us on the merits (or not) of engaging Risk Management consultants. In response to this and to requests from our members, this tea talk was scheduled. Members also requested that Mr Ramesh Pillai, the most senior ERM practitioner in Malaysia, deliver the talk.
Mr. Ramesh Pillai is the Chairman of the International Board of Governors of the IERP®. With over 30 years of Risk Management experience, he was the pioneer of ERM in Malaysia, was one of our first CRO’s and is also a recognized Global pioneer in Enterprise Risk Management and the implementation of ISO 31000, ISO 31004 and 31010 practices.
Mr. Pillai presented the audience with a lively presentation full of practical examples of how poorly qualified Risk consultants failed to generate value for their clients and often implemented poor ERM practices – causing extensive damage to the credibility of ERM practices and their practical effectiveness in an organisation.
The net effect of all of this would be to relegate the discipline and processes of ERM to one of “form with no substance”. He went on to conclude that there were too many internal audit consultants and accountants being engaged to implement ERM – which they were clearly not qualified to do. However, more disturbingly, the trend appeared to be the emergence of software vendors and ISO consultants implementing ERM as “ERM experts” – all of which would have far reaching and extremely damaging consequences for any company caught in such a situation.
Mr. Pillai concluded by urging the audience to seek relevant and appropriate knowledge and experience as well as by exchanging views and experiences with fellow members of the Institute and properly qualified and experienced ERM practitioners.