If we can build and nurture people within an organisation to be always attuned to risks that may affect the organisation, whatever their nature or origins, then there is a good chance that any system, process and framework constraints will be more easily overcome and less likely to inflict major losses on the organisation. When faced with challenging business and financial conditions and a highly dynamic environment, it is always more important to have excellent people than excellent models. BCM as part of enterprise risk management This brings me to the more specific area of business continuity management, or BCM. A paper published in 2008 by the Chartered Management Institute of the United Kingdom found that 76 percent of the survey respondents reported that business continuity management is seen as important in their organisations but only less than half revealed that they have specific business continuity plans. There are several reasons for this which I will not get into here, but a major one is the lack of metrics to measure success in the absence of a major institutional crisis. One commentator put it this way – the return on investment is simply that business stays open. Two contrasting examples of BCM help to underscore this point. Investigations by the Japanese Government into the Fukushima tsunami disaster revealed material inadequacies in the handling of complex risks associated with managing a nuclear power plant. This was demonstrated in poorly executed emergency procedures in evacuating residents during the incident. Consequently, the operations of the power plant were suspended.

Taken together, the reforms are expected to result in wider product offerings and delivery channels, service quality improvements, greater market transparency, and more differentiated pricing that is reflective of risk. 4  BIS central bankers’ speeches  This will help risk managers for whom the decision to purchase insurance is increasingly driven by wider considerations which go beyond just the intention to transfer risk. Significant advancements in risk management practices and financial innovations have substantially broadened the actions that risk managers can take to control risks. For many companies, insurance solutions are no longer viewed as the only, or even the most important, way to reduce risk exposures. The insurance reforms will allow the industry to better respond to changing demand drivers. Importantly, it will also create opportunities to build stronger partnerships between corporate risk managers, insurance companies and insurance brokers in elevating risk management practices more generally. This includes a wider role envisaged for the industry in providing risk advice to clients, and initiatives to advance the quality and coverage of risk information that is useful to risk managers across a broad spectrum of areas, such as information on hazard exposure, demographic changes and technological risks. Conclusion In conclusion, maintaining that delicate balance between extreme risk aversion and wellreasoned risk taking, which is essential for businesses to grow and prosper, will always involve difficult judgements. We should be careful to ensure that advancements in risk management practices are serving to sharpen, and not blunt, such judgements.