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Meeting the risk governance demand

Education is key when it comes to challenging the issues surrounding risk governance the financial market—not just in Australia, but in international financial markets also.

As a means of overcoming some of those issues, Macquarie University, in partnership with well-known Massive Open Online Courses (MOOC) platform, Coursera, is looking to provide a risk governance course to improve industry understanding around risk governance obligations and the critical issues of conduct and culture.

The course, entitled ‘Engage the Board’, is intended to help professionals do just that, through either an open version of the course or as a degree that will be assessed by Macquarie University.

“What we are trying to do is provide a wholistic approach to risk governance—so, not just financial risks, but the non-financial risks,” Professor Elizabeth Sheedy from the Applied Finance Division of Macquarie University told the GRC Professional, earlier this week.

The course will be rooted firmly in ISO 31000, which is the risk management framework, and students will work through detailed case studies to bring the standards and obligations into a modern context.

“We will also talk about governance issues, the role of the board, three lines of defence, risk culture, risk management maturity and incentive conflicts,” said Sheedy, “so there is a big governance context in this.” She added that there is a lot of time spent on misconduct risk because it is an issue that is proving difficult for companies.

This course is not only aimed at the larger end of town. “We also look at risk management in smaller organisations and start-ups. It is not just intended for those in financial services, by any means.”

However, beyond the fundamentals of governance and risks management, Sheedy said the course will also explore the relationship between risk management and innovation.

“When you think how many super funds there are, and every one of them needs to implement risk governance, they need people to go on their risk committees. But where are these people coming from? How can they get skilled up? Particularly, when we consider that, for most of them, their executive experience won’t have been in a risk management role.”

Sheedy added that there are also the reports coming out of APRA that highlight problems in the country’s boardrooms.

Earlier this year, GRC Professional interviewed Sheedy in relation to the information sheet that detailed the self-assessments done by 36 entities regulated by the APRA. “Many organisations do culture assessments that paint an unrealistically-favourable impression,” Sheedy said, at the time. “The methodologies used by many consultants are poor to say the least—for example, using survey instruments that lack evidence of validity and reliability, conducting culture assessments in the context of a staff engagement survey, running culture surveys that are invitational rather than anonymous (that is, every person has a unique link so people feel pressured to give a favourable rating), and so on.”

Sheedy has been highly critical of untested change management programs in the past and has also challenged the validity of the other measurement tools, such as the balanced score card.

Next week, Sheedy will be running a webinar to introduce the course. You can click here for more information.

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