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Taking risk management to the next level: Building a resilient risk culture

As economic and societal risks continue to be a key focus area for businesses across Africa, many of which are outlined in the 2024 Global Risks Report, leaders are eager to take risk management to the next level.

Fundamentally, mitigating risk describes the process, or the how. But achieving the region’s ambitious goals for 2030 requires attention to the why: Instilling a company-wide risk and resilience culture is essential to thrive in the face of known and unknown disruptions.

Risk management and resilience are related, not one in the same

While often conflated, risk management and risk resilience have a few key distinctions. Risk management is a component of building resilience that focuses on identifying and assessing risks, then implementing strategies to reduce or control their potential impacts.

If risk management is rooted in a systematic process, risk resilience is the high-level, holistic approach an organisation takes to anticipate, respond to, and plan for current and future disruptions. Risk resilience emphasises building adaptive capacity and preparedness, through open communication and revaluation of risk, strategic scenario and contingency planning, and integration of risk management across operations.

Leadership has a critical role in building risk awareness

The region is experiencing a shift in how leadership approaches risk, marked by increasingly open discussions around emerging risk and opportunities for improvement. This is critical, considering the c-suite sets the tone for building a risk culture and spreading awareness across teams and down to each employee. 

In many organisations, risk management may be contained among risk leaders or committees. However, c-suite and risk leaders can and should help unite their organisations under a common view of risks, potential oversights, and opportunities to be more proactive at the department and individual level.

This may take the form of risk awareness sessions, trainings, or webinars to remind employees that risk doesn’t operate in a silo, but rather affects all corners of an organisation. This is especially true when a crisis hits, and why it’s critical to build a risk-aware culture that can get ahead of disruptions proactively.

Flexibility and agility are cornerstones of a resilient culture

Establishing a resilient risk culture depends on an organisation’s flexibility and agility. The question is: How can organisations build both into their processes? One approach is through regular scenario planning, which involves analysing plausible risk scenarios and thinking critically about contingency plans.

Mapping out potential scenarios creates a framework for ongoing risk strategy evaluation and adjustment that encourages team to be flexible, creative, and strategic in a lower-stakes situations. This preparation helps teams flex these muscles early and often, so they are better prepared when a situation arises.

This planning should engage stakeholders from various departments and levels of the company to promote cross-functional collaboration and demonstrate a shared commitment to addressing risk as a collective.

Establishing a risk culture is not a fringe benefit, but a necessity

The organisations that thrive in a changing risk environment are not only mitigating and responding to the challenges right in front of them, but also, they are wired to think strategically about future resilience because it is built into their company culture.    

Now and into the future, building a successful risk and resilience culture is crucial for business leaders in Africa as global environmental risks and a host of region-specific economic and societal risks remain top priorities.