Risk Leadership

The role of risk leadership cannot be overestimated. This is not just about the work of leaders in the organisational hierarchy.  Risk leadership has several different facets:

• Leaders. Leaders powerfully influence culture and behaviour. Through their actions and decisions, they determine whether and how risk thinking is part of decision making.  By their behaviour, they also impact upon the risk culture and powerfully influence whether people feel free and safe to raise difficult issues, to take appropriate risk and to pursue opportunities.
  
  
• Staff.  Everyone in the organisation demonstrates risk leadership each time they proactively raise a concern or risk, or deliberately share risk knowledge with others.  It is through this form of personal risk leadership that difficult issues are dealt with and there is opportunity for innovation and change.
  
  
• Risk Management Specialists.  Unique risk leadership is required from those in specialist risk management advisory or governance roles.  This is not only through their daily work, but also by remaining abreast of the latest management thinking and practice.  They need to show intellectual leadership, including the ability to challenge risk standards and usual practice.

A leader who enforces risk management processes is showing some level of risk leadership simply by reinforcing the need for risks to be managed.  However a much more powerful level of risk leadership is demonstrated by a leader who is inquisitive, open to ideas and feedback and who demonstrates through personal qualities the beliefs and behaviours required for learning and adaptation. 

At the strategic level, the most significant risk work of senior leaders is not about managing risks at all.  It is to build risk management capability in the culture, people and systems of organisation.  Although they also need to work on strategic risks, ultimately this is much less important than doing the work necessary to build an organisation that is agile, responsive and resilient.   This is difficult, long term strategic work and is seldom done well.  Nonetheless it is the single most critical element of effective risk management work.