Page 33 - IRMSA Risk Report 2023

ALEX HETHERINGTON

6.5 INTEGRATED METHODOLOGY

Furthering this idea, Alex Hetherington from Third Line Group reinforces the
need for well-researched scenario analysis. He explains that this allows threats and
opportunities to be identified to build resilience. An example is how the investment
community is increasingly measuring the future worth of a company in terms of its
climate-change response. This may be an indicator of a shift in thinking around
risk, specifically in terms of climate change but potentially opening into a broader
expression.

Hetherington diagnoses the response to climate change as a measure of how much
one has been exposed to its effects. In this sense, it shows that negative risk analysis
as a reactive discipline presents a risk.

Professor Mohale reiterates that “Understanding risk and its management is not just
about trying to anticipate the future – it’s about the level of preparedness. It’s about
exercising the mental muscle to ensure that, when we are hit with something that we
didn’t anticipate – like we were blindsided by the pandemic, like we were hit with the
two weeks in July, like we were hit by the floods in KwaZulu-Natal during Easter and
again during May – that you have gone through a process [and] you’ve got a system
of dealing, of anticipating, of responding.”

Palm expands on the idea of integrated risk assessment by relying on expert
knowledge: “My advice would be to listen to the people who know; the strategists, risk
professionals and futurists. You’ve got to involve them and leverage their contributions
when integrating the strategy, risk, and resilience conversations. Governing bodies
can benefit from at least considering their recommendations and how it would play
out when put into action – i.e., considering different futures. Building alternatives and
robustly stress testing them so when a quick, complex decision is need, alternatives
are available.

Lawangee emphasises the need for agility: “Think of this as our own organisation.
There’s the ‘fail-fast’ mentality where if an employee’s attempt at something doesn’t
work out, you fail fast and move on to the next thing. Failure can be a very good
teacher. I think that type of environment allows you to be more agile and more
responsive to risk that you can’t foresee on an excel spreadsheet – otherwise people
will just be paralysed and won’t know what to do.”

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