“That way an organisation can prioritise the risks together culturally, and there are no sacred cows. It is also important to have someone there to say, let’s not chase yesterday’s risk,” she says. Oglanian likes to “borrow” from the IT sector and its approach to organisational risk. “IT is so expensive and so essential they are forced to have procedures and apply dollars to the highest risk,” she says. “In prioritising risk they have a mitigation plan and a dollar budget. The process is smart.”
Olganian believes the pension industry should aim to apply the tenets of risk that the IT industry does – the ability to create a strategy that is transparent and create a shared understanding of risk. “When they are tackling enterprise risk a lot of firms create a committee instead of looking at it in a way that the ownership of risk has to be at every desk, not just the executives’,” she says. “It is essential to establish a shared language and a shared understanding of risks. The heads of business need a holistic approach, they need to understand the nexus. Alpha that gets created can be lost because of an operational mishap. The management of risk must be interdisciplinary and pension funds need to realise the risk management function should put you at a competitive advantage.”
