Sara McAllister, Partner and Head of Business Risk Services, Grant Thornton, leads a team of professionals who advise corporate and public sector clients on all things risk management.
Sara, herself a qualified chartered accountant and risk professional, has sat on both sides of the table - as a client and an advisor. She has held senior internal audit and operational risk roles within industry, home and abroad, and has also spent a large part of her career to date in professional services. As a result of these experiences, Sara is acutely aware of the need to listen carefully to her clients and provide pragmatic advice. She understands the importance of being honest about whether a solution is right or wrong for their business depending on its risk maturity and future strategic agenda.
Sara is of the view that now more than ever, “Is the time to have a grown up conversation about risk management. Risk management needs to enable and not just mitigate and manage. It needs to be transparent and most importantly, it should be right sized to optimise a clients’ strategic, operational and transformation ambitions.”
Most businesses are coming out of the pandemic with a need to reinvent, reposition or re-energise their businesses. Transformation is happening across people, processes and technology at a scale never seen before. Such change brings plenty of opportunity and energy, but also risks that need to be actively managed, if the much-hoped-for commercial and reputational rewards are to come to fruition.
As strategies are updated, over-hauled or thrown out completely, strategic thinking today is largely focussed on transformation, change, agility and innovation. Everyone is racing to be first to embrace agility, deploy hybrid working, collaborate and improve resiliency. With all of these strategic initiatives comes the need to re-evaluate business models, operational structures, technology infrastructures and skillsets.
This is a lot for any business, of any size or scale to contend with and address, most especially when coming out the other side of such a sizeable risk event as a pandemic.
Alongside a shift in strategic thinking for many, is the fact that most businesses have also realised that they need to revisit their approach to risk management if they are to improve their operational resilience to ensure success in their strategic and commercial endeavours going forward
An underinvestment by many in risk management historically has resulted in significant, and in many cases avoidable, business impacts. The absence of an integrated approach to managing risk has meant money has often been spent on addressing a small number of risks in silos, without an enterprise-wide view of risk across a business. In fact, the risk culture of many businesses has not moved forward significantly in recent years, despite distinct changes in customer, technology, supply chain and outsourcing models, all of which influence how business is done today.
Sara and her team help businesses sit down and decide how best to approach risk management in the context of what they want to achieve, how they want to be known and the opportunities they want to pursue.
Sara is very clear that, “Risk management does not have to become over-engineered, but it does need to provide a transparent view of risk across a business and inform real time management decision-making, so as to best address business needs and the pace of change in a clear, proactive and transparent manner.” Sara believes all of this can be achieved without curtailing ideas or innovative thinking.
At the end of the day, business transformation initiatives are undertaken to build agility and adapt to market changes. Environmental, social and technological disruptions are impacting our lives and society at large on a daily basis. To keep up with new and emerging risks, businesses should revisit risk management programmes to best manage and mitigate interdependent risks associated with changes in people (employees, customers, suppliers), processes, systems and operations.
Accountability for risk management also needs to change. Risk can no longer be viewed as separate to the ‘day job’ but instead should be viewed as inherent within each role or job description. This has to happen if risk management is to be truly embedded in a business, and in fact embraced. Ultimately risk should not be viewed as a chore, but a business enabler and even a critical success factor when leveraged effectively.
Actively risk managing sizable change and transformation programs is fundamental to the success of such initiatives. However, if truly sustainable business growth and resilience is to be delivered, then it is critical to get ahead of the game by adequately risk managing change and transformation alongside the array of other strategic and operational risks facing any business today.
Notwithstanding the headline strategic risks associated with a new or updated business plan, or the financial risks of funding strategic initiatives and day to day operations, are the ever-increasing operational risks that business have to navigate in their new normal.
When you consider things like third party risk, supply chain, distribution, regulatory, sustainability and environmental, people risk, business continuity, digital, cloud, cyber and data protection, effectively managing risk is pretty overwhelming. However, Sara is clear, “Keeping risk management simple is best and taking a holistic view of the what? why? and how? gives a business the best chance to run hard in pursuit of opportunities. Businesses that adopt this approach have the confidence of knowing they have boxed clever in managing potential exposures, and can focus on the potential upsides.”
A recent example would be the acknowledgement of a client to enhance the risk management of their supply chain, if it was to compete in changing market expectations. Sara and her team advised on prioritising the fundamentals and assisted with designing a standardised approach to risk assessing and actively managing priority risks within the clients’ supply chain; including concentration, business continuity, sourcing, anti-bribery and corruption, modern slavery and sustainability risks.
This solution has provided the client with greater transparency on how their supply chain risks are being actively managed and mitigated which has improved the robustness of their supply chain, market credibility and their ability to actively compete for strategic and more commercially advantageous contracts.
At the end of the day every business can only grow and generate value by making strategic business decisions. Every one of these decisions means taking risks. Having a simple and effective enterprise risk management programme that informs what can happen, why it manifests and how to respond, means a business can focus on sustainable growth and success, by managing the risk of perpetual state of change and transformation seamlessly. Being able to stand back and achieve this balance is what every business wants and needs right now.