‍In today’s corporate landscape, the prevalence of justification as a means to evade responsibility has become a concerning norm. As organizations grapple with this issue, the concept of risk ambassadors has emerged as a potential solution. Risk ambassadors are individuals within a business unit who act as representatives and promoters of proper risk management activities. While they are not risk managers themselves, they serve as liaisons between the risk management department and their respective departments, ensuring clear communication and a comprehensive understanding of the risks involved.

The Role of a Risk Management Ambassador

According to the dictionary, an ambassador is “a person who acts as a representative or promoter of a specific activity.” In the context of risk management, a risk management ambassador is someone who carries out their regular duties within a business unit while also advocating for effective risk management practices. These individuals serve as a direct line of communication between their department and the risk management department, facilitating the exchange of information and insights.

The primary benefit of having a risk management ambassador is the enhanced clarity on what is happening within a specific department. By actively engaging with the risk management department, they gain a comprehensive understanding of the risks associated with their department’s activities. This knowledge allows them to generate an overall risk management perception, potentially reducing the occurrence of negative events and promoting proactive risk mitigation strategies.

The Importance of Diplomacy and Trust

While the concept of a risk ambassador holds significant potential, there are potential drawbacks that must be considered. One major concern is the risk of being viewed as a snitch or creating mistrust within the department towards the risk management team. To overcome these challenges, a risk management ambassador must embody the qualities of an ambassadorship: diplomacy, tact, and trustworthiness.

Building trust and credibility within a department they are not directly part of or paid by is no easy feat. However, with the changing dynamics brought about by the COVID-19 pandemic, the concept of a risk ambassador becomes even more relevant. As organizations transition back to in-person work, establishing a risk ambassador program could be a valuable addition to the risk management department, fostering effective communication and risk awareness in the new office face-to-face norm.

Real-World Examples and Future Possibilities

While the concept of risk ambassadors is not widely implemented, there are instances where it has been successfully utilized. For example, a large financial institution implemented a risk ambassador program before the COVID-19 pandemic. Unfortunately, the current state of remote work makes it challenging to assess the program’s effectiveness in this context. However, exploring the potential of risk ambassadors in a post-COVID-19 world is a promising avenue for the risk management department.

The question arises: can risk ambassadors be the answer to justification busting? By actively promoting risk management practices and facilitating clear communication, risk ambassadors can play a crucial role in mitigating the prevalence of justification within organizations. Their presence can help foster a culture of accountability and responsibility, encouraging employees to take ownership of their actions and decisions.

Conclusion

In conclusion, the concept of risk ambassadors offers a unique approach to addressing the issue of justification within organizations. By leveraging individuals within business units as representatives and promoters of risk management activities, organizations can gain greater clarity on risks, reduce negative events, and improve overall communication. However, it is crucial to approach the implementation of risk ambassadors with diplomacy and trust-building in mind, ensuring that they are viewed as valuable assets rather than informants. As we navigate the changing dynamics of the post-COVID-19 workplace, exploring the potential of risk ambassadors becomes even more critical in fostering a culture of accountability and responsible decision-making.

In today’s rapidly evolving business landscape, the concept of Ethical Capitalism has gained significant traction. This business model seeks to balance the pursuit of profit with a strong commitment to social responsibility, ethical behavior, social justice, and environmental sustainability. By operating in an ethical and responsible manner, businesses aim to create a sustainable and equitable society that benefits all stakeholders.

Understanding Ethical Capitalism

Ethical Capitalism can be visualized as a delicate balancing act between profit-driven objectives and social responsibility. The first diagram below illustrates this concept, showcasing how businesses can navigate the complexities of modern capitalism while upholding their obligations towards stakeholders, including customers, employees, shareholders, and the environment.

Businesses that embrace Ethical Capitalism recognize that they have a responsibility beyond just generating profits. They understand the importance of considering the social and environmental impacts of their actions and strive to create value for all stakeholders involved. By aligning their business practices with ethical principles, companies can contribute to the greater good and foster long-term success.

The Role of a Code of Conduct

A crucial component of Ethical Capitalism is the implementation of a comprehensive code of conduct. This code serves as a guiding framework that outlines the values and principles that underpin a company’s ethical behavior. It sets the expectations for how individuals within the organization should act and make decisions, ensuring consistency and accountability.

A code of conduct is not simply a document; it is a living embodiment of an organization’s commitment to ethical conduct. It should be rooted in the company’s core values and effectively communicated to all employees and stakeholders. By doing so, the organization can foster a culture of ethical behavior and responsible decision-making.

Establishing Ethical Guidelines

A code of conduct should address various aspects of ethical behavior and provide guidelines for day-to-day operations. These guidelines may include:

1. Respect and Integrity

Respect for individuals, regardless of their background or position, is paramount in an ethical organization. Employees should be treated with fairness, dignity, and equality. Integrity should be upheld at all times, promoting honesty, transparency, and accountability.

2. Compliance with Laws and Regulations

Operating within the boundaries of the law is a fundamental ethical obligation for businesses. Adhering to all applicable laws and regulations helps ensure that companies operate responsibly and avoid any legal or reputational risks.

3. Environmental Responsibility

Ethical organizations understand the importance of environmental sustainability. They strive to minimize their carbon footprint, conserve resources, and implement eco-friendly practices. By doing so, they contribute to the well-being of the planet and future generations.

4. Fair Competition and Anti-Corruption

Ethical Capitalism promotes fair competition and condemns unethical practices such as bribery, corruption, and anti-competitive behavior. Organizations must foster a culture of fair play and ensure that their business practices are free from any form of unethical conduct.

Benefits of a Code of Conduct

Implementing and adhering to a code of conduct offers several advantages for organizations committed to Ethical Capitalism. These benefits include:

1. Ethical Decision-Making

A code of conduct provides a framework for ethical decision-making within the organization. It helps employees navigate complex situations and make choices that align with the company’s values and principles.

2. Stakeholder Trust and Reputation

Operating ethically and responsibly enhances trust with stakeholders, including customers, employees, and shareholders. A strong reputation for ethical behavior can positively impact brand loyalty, customer retention, and overall business success.

3. Employee Engagement and Retention

An organization that prioritizes ethics and social responsibility is likely to attract and retain talented employees who align with its values. A code of conduct fosters a positive work environment, promoting employee engagement, satisfaction, and loyalty.

4. Legal and Regulatory Compliance

A well-defined code of conduct helps organizations ensure compliance with relevant laws and regulations. By explicitly outlining expectations, organizations can minimize legal risks and potential liabilities.

Implementing and Enforcing a Code of Conduct

To effectively implement a code of conduct, organizations must follow a structured approach:

1. Develop a Comprehensive Code

The code of conduct should be comprehensive, addressing all relevant ethical considerations within the organization. It should be drafted in a clear and concise manner, using language that is easily understood by all employees.

2. Communicate and Train

Once the code of conduct is developed, it is essential to communicate it to all employees and stakeholders. Regular training sessions and workshops can further enhance understanding and ensure that everyone is aware of their responsibilities.

3. Enforce Consistently and Fairly

Enforcement of the code of conduct is critical for its effectiveness. Organizations should establish mechanisms to monitor compliance and address any violations promptly and fairly. This may involve disciplinary actions, retraining, or other appropriate measures.

4. Periodic Review and Update

A code of conduct should not be static but rather a dynamic document that evolves with changing societal expectations and business practices. Regular reviews and updates ensure that the code remains relevant and effective over time.

Conclusion

Ethical Capitalism represents a progressive approach to business that seeks to balance profit-driven objectives with social responsibility. A comprehensive code of conduct serves as the cornerstone of Ethical Capitalism, providing a framework for ethical decision-making and guiding organizations towards greater accountability and sustainability. By embracing Ethical Capitalism and implementing a robust code of conduct, businesses can create value for all stakeholders, contribute to the greater good, and build a prosperous and equitable society.

Is a code of conduct a living breathing document in your organization?

What’s that expression, a change is just as good as a rest? Sometimes, when our careers hit a roadblock, taking a different path can provide the rest and reset we need. As someone who experienced setbacks in the financial services industry, I found myself in need of a break and a chance to refocus on my career goals. So, I decided to take on a unique challenge – working on a factory floor. Little did I know that this experience would not only provide the rest I needed but also challenge my assumptions about risk management and compliance. In this article, I will share my journey of spending a year on the factory floor, the lessons I learned, and how my assumptions about risk management were both confirmed and changed.

A New Perspective on Risk Management

One of the main motivations behind my decision to work on the factory floor was to experience a completely different compliance and risk management structure outside of the financial services industry. I wanted to challenge my assumptions and see if risk management and compliance could be used as a business partner rather than a hindrance to growth. To my surprise, I discovered that risk management can indeed be a driving force for a company’s success. While it may not be explicitly labeled as risk management, the concept of continuous improvement on the factory floor is essentially a form of risk management in action. By constantly reviewing processes, seeking upgrades, and eliminating waste, the focus is on identifying and mitigating risks, whether positive or negative.

Continuous Improvement: A Form of Risk Management

Continuous improvement is a core principle on the factory floor. It involves regularly observing and analyzing processes to identify areas for improvement. This focus on continuous improvement also highlights potential risks and provides an opportunity to address them. By constantly striving to reduce negative risks and capitalize on positive risks, the factory floor embraces risk management in its pursuit of excellence. This experience challenged my assumption that risk management and continuous improvement were fundamentally separate concepts. In reality, they are closely intertwined, with continuous improvement serving as a practical application of risk management principles.

Transferable Leadership Skills

Another assumption I had was that good risk management leadership skills were specific to the financial services industry. However, my time on the factory floor proved otherwise. The skill sets required to nurture and foster a culture of continuous improvement are remarkably similar to those needed to lead a risk management process in any industry. Effective communication, the ability to analyze data, and the talent for motivating and inspiring teams are all essential qualities for successful risk management leadership. This realization shattered my preconceived notion that risk management skills were confined to a particular sector.

Oil and Water: The Relationship Between Risk Management and Other Departments

One assumption that still holds some merit is the belief that risk management and compliance departments are like oil and water, unable to mix seamlessly with other departments. During conversations with project managers, I noticed some reluctance and hesitation to fully embrace the risk management process. However, I also observed that when their performance bonuses were tied to project delivery, adherence to the risk management program became a priority. The promise of a year-end bonus incentivized project managers, even if they didn’t fully appreciate the value of risk management. This observation confirmed that, to some extent, there is still a divide between risk management and other departments. However, it also highlighted the importance of aligning incentives to encourage the integration of risk management practices throughout the organization.

Conclusion

In conclusion, my year on the factory floor provided more than just a career rest and reset. It shattered some assumptions while confirming others. I discovered that risk management can be a powerful business partner, driving continuous improvement and success. The leadership skills required for effective risk management are transferable across industries, challenging the notion of specialization. Additionally, while there may still be some resistance to the integration of risk management in certain departments, aligning incentives can bridge the gap. Overall, my journey on the factory floor has given me a fresh perspective on risk management and paved the way for a more holistic approach to business growth and success.

Please let me know if you have had the same experience, and how you coped?

Risk management is a crucial aspect of any business, helping organizations identify and mitigate potential risks that could impact their operations. However, the success of a risk management program heavily relies on the expertise and approach of the risk manager or consultant involved. In some cases, the arrogance of a risk manager can lead to ineffective and unproductive outcomes, causing frustration and dissatisfaction for the client. In this article, we will explore the consequences of dealing with an arrogant risk manager and discuss the qualities that make a consultant successful in the field.

The One-Sided Approach: Dictating Rather than Collaborating

One of the primary issues that arise when working with an arrogant risk manager is the dominance of their demands and opinions during discussions. Instead of engaging in a collaborative dialogue and gathering relevant information, these risk managers tend to impose their own agenda on the client. This one-sided approach not only undermines the client’s perspective but also disregards the purpose of hiring a risk manager in the first place – to seek professional guidance and expertise.

The Need for Information Gathering and Understanding

To effectively assess and manage risks, a risk manager must invest time and effort in understanding the client’s business, industry standards, and specific requirements. However, an arrogant risk manager may overlook this crucial step, diving straight into making demands without fully grasping the client’s unique situation. This lack of information gathering can lead to unnecessary policies and procedures being suggested, wasting the client’s time and resources.

The Value of a Collaborative Relationship

Successful consultants and auditors understand the importance of building a collaborative relationship with their clients. They view the engagement as an opportunity to provide valuable service and contribute to the client’s success, rather than merely generating revenue for their firm. These consultants actively listen to their clients, take the time to understand their needs, and tailor their recommendations accordingly. By fostering a collaborative relationship, consultants can ensure that their clients receive the maximum value from their expertise.

Differentiating Good Consultants from the Rest

Not all risk managers exhibit arrogance in their approach. In fact, many consultants and auditors go above and beyond to deliver exceptional service and results. Their focus is on understanding the client’s business, providing relevant recommendations, and ultimately helping the client achieve their goals. By learning from the success stories of such consultants, aspiring risk managers and compliance officers can enhance their own skills and ensure positive outcomes for their clients.

The Significance of Client Treatment

Treating clients with respect and empathy is a fundamental aspect of successful consulting. Consultants who prioritize client satisfaction build lasting relationships based on trust and mutual respect. These consultants are attentive listeners, actively seeking to understand their clients’ needs and concerns. By treating clients as partners in the consulting process, rather than dictating to them, consultants can establish a foundation of trust and collaboration.

Continuous Learning and Improvement

Successful consultants never stop learning. They are committed to staying updated with industry trends, best practices, and regulatory requirements. By continuously improving their knowledge and skills, consultants can provide clients with the most relevant and effective solutions. This proactive approach demonstrates a genuine commitment to client success and sets successful consultants apart from their peers.

The Power of Reputation

A consultant’s reputation plays a significant role in their success. Consultants who consistently deliver exceptional work and achieve positive outcomes for their clients build a strong reputation within the industry. Word of mouth referrals and positive testimonials from satisfied clients can lead to a steady stream of new opportunities. By prioritizing client satisfaction and consistently delivering value, consultants can establish themselves as trusted experts in the field.

Becoming a Successful Consultant: Lessons Learned

If you aspire to become a risk manager or compliance officer, seeking opportunities to transition into consulting can be a rewarding career move. By observing and learning from successful consultants, you can adopt their strategies and mindset to create meaningful relationships with your clients. Remember, it is essential to treat clients with respect, actively listen to their needs, and continuously enhance your knowledge and skills.

In conclusion, the arrogance of a risk manager can hinder the effectiveness of a risk management program. Collaborative relationships, information gathering, and understanding the client’s unique needs are vital for success in the consulting field. By emulating the qualities of successful consultants, aspiring risk managers can navigate the challenges and deliver exceptional service to their clients. So, let us strive for a consultancy industry where arrogance is replaced with collaboration, and client success is the ultimate goal.

Have you had the experience of a consultant coming across as a know it all?

In today’s rapidly evolving world, the perception of professionalism has undergone significant changes. What it means to be a professional, the qualities that mark someone as a professional, and the ethical standards associated with different professions have all shifted. This article explores the concept of deep versus shallow professionalism, shedding light on the contrasting characteristics and implications of these two approaches.

Defining Professionalism

Professionalism is a term used to describe the conduct, qualities, and characteristics that distinguish an individual as a professional. Traditionally, professions such as doctors, lawyers, accountants, and athletes were considered examples of deep professionalism. These individuals dedicated years of education and training to their craft and were required to meet stringent requirements to obtain the necessary credentials.

The Rise of Shallow Professionalism

Over time, shallow professionalism has emerged as a phenomenon that co-opts the deep professionalism of certain fields. Shallow professionals create a facade of being experts in their respective domains but lack the same level of education, training, and credentials as their deep professional counterparts. This raises questions about the ethical standards maintained within shallow professions.

Ethical Standards and Shallow Professionals

One of the key concerns surrounding shallow professionalism is the low ethical standards that often accompany it. Shallow professionals may lack the same level of commitment to their field, leading to a higher likelihood of poor ethical behavior. This includes conflicts of interest, unethical practices, and a disregard for the consequences of their actions.

For risk managers and compliance officers, the presence of shallow professionals within an organization poses significant risks. Deep professionals have their livelihoods at stake, as they can face sanctions, loss of licenses, or the revocation of hard-earned designations for unethical behavior. On the other hand, shallow professionals can often walk away from their actions without facing any significant repercussions.

Identifying Shallow Professionals

Detecting shallow professionals can be a challenging task. In my past experiences, I have found that assessing an individual’s perception of regulators can provide valuable insights. Those who maintain a consistent tone and attitude, irrespective of the topic, may indicate a deep professional mindset. However, those who exhibit a change in tone or make disparaging remarks may raise red flags.

It’s crucial to keep a watchful eye on individuals who claim to be professionals but exhibit shallow professional traits. Monitoring their actions, adherence to company policies and procedures, and their overall ethical conduct can help identify and manage potential risks associated with shallow professionalism.

The Significance of Professionalism

The concept of professionalism holds immense importance in various fields. It ensures the delivery of high-quality services, maintains ethical standards, and fosters trust between professionals and their clients or stakeholders. Deep professionalism, with its focus on continuous learning, skill development, and adherence to ethical guidelines, is crucial for maintaining the integrity and reputation of professions.

The Changing Landscape of Professionalism

As society evolves, the definition and perception of professionalism continue to transform. The traditional view of deep professionalism is being challenged, and new forms of professionalism are emerging. This shift is driven by factors such as technological advancements, changing work dynamics, and evolving societal expectations.

Nurturing Deep Professionalism

To address the challenges posed by shallow professionalism, it is essential to nurture and promote deep professionalism within all fields. This can be achieved through:

1. Education and Training: Emphasizing the importance of rigorous education and continuous learning to develop deep expertise in a profession.
2. Ethical Guidelines: Establishing and enforcing robust ethical standards to ensure professionals uphold integrity and accountability.
3. Mentorship and Guidance: Encouraging experienced professionals to mentor and guide younger generations, instilling the values of deep professionalism.
4. Recognition and Rewards: Recognizing and rewarding deep professionals for their contributions, expertise, and commitment to their fields.

Conclusion

Deep versus shallow professionalism is a topic of increasing relevance in today’s world. The distinction between these two approaches highlights the importance of upholding ethical standards, maintaining rigorous education and training, and continuously evolving to meet the evolving demands of our professions. By nurturing deep professionalism and identifying and managing the risks associated with shallow professionalism, we can ensure the integrity and sustainability of our professions for generations to come.

Have you experienced shallow professionals acting as an experienced professional?