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October - November 2009
CII’s summit on risk management attracts eminent speakers from the business world
Highlighting the importance of risk management in an enterprise, Mrs Chanda Kochhar, Managing Director & CEO, ICICI Bank said, “Risk should not be avoided due to over obsession with safety. Risks need to be assessed, measured and monitored effectively.” Mrs Kochhar was speaking at the Risk Management Summit, organised by Confederation of Indian Industry (CII) on the theme “Building Risk Resilience: An Imperative for Success” in Mumbai.
Mrs Kochhar stressed that each organisation had different risk appetite and that it should fairly assess its own risks, measure them and evolve a monitoring mechanism to deal with those risks. Against the backdrop of global financial crisis which had its origins in disregard of adequate risk management framework in companies, Mrs Kochhar highlighted ten principles of risk management. Comprehensive assessment of overall risk, measuring co-relation amongst different risks, ensuring that entity that holds the risk finally assesses the risk, modifying models for monitoring risks along with changing times, regulations to keep pace with innovation and aligning incentive structure to risk managements were stressed upon for risk mitigation. “The ABC of business is anticipation, business opportunity and checks and balances”, said Mrs Kochhar.
Mr U K Sinha, Chairman and Managing Director UTI Asset Management Company Pvt Ltd, said that respect for internal committees like audit committees, bridging of inter-regulatory gaps and focus on long term performance would ensure effective risk management. Mr Sinha cautioned that enterprises need to worry if the income from core business is insignificant when compared to other businesses of the enterprise.
“There is no enterprise if there is no risk”, said Mr R Seshasayee, Past President CII. Mr Suresh Senapaty, Exec. Director & CFO, WIPRO said that proper risk management involves defining risk objectives. A company should classify risks as those with high probability, high impact or both for mitigation and reporting purposes.