If you think about it, risk touches almost every part of our daily lives and businesses. Every time we drive a car, we accept the risk of damage and injury. If we start a business, we accept risks associated with property, reputation and finances.
Learning how to manage risk in your daily life will certainly make it easier when things go wrong. In fact, if you study risk management, you could even find yourself being able to identify and explore potential risks in your personal life, our organisations or even on an international scale.
By understanding what risk management is, you’re more likely to understand its importance in any business environment. Think of it this way, risk management is effectively the process of attempting to control future outcomes by being proactive rather than reactive.
There is little or no mention of risk management in most formal school education. Children are not exposed to risk and uncertainty and consequently there is the danger that they grow up in the world either expecting certainty or having a very negative view of risk.
There is little or no provision for full-time post-school education in risk management. Where such education does exist, it is largely dominated by the skills of the particular institution and has not taken the inter-disciplinary route.
Like all other fields, the time to start educating students about risks and being prepared to handle the same must start at school. Risk management at this level need not be a separate subject or paper.
What a clever and creative curriculum constructor and developer will do is to include these elements in all that is taught; irrespective of the subject being taught; mathematics (sums can deal with risky ventures), science (accidents, first aid, poisons and chemicals), Geography (dangers that could be experienced due to climate change) and so on.
Once the young minds are aware that things could go wrong if not dealt with correctly and at the right time; the difficulty levels will automatically surface
Local, foreign, and regional education and training institutions too can play a vital role in the promotion of risk management in our country. Universities in many developing countries have well-developed management and other programmes, however, risk management is not commonly taught.
The policymakers may want to consider having such courses, or perhaps even having an entire curriculum, offered through the universities.
Many developing countries have insurance training and safety related institutes that can be an important source of risk management information and training.
Already, some institutes in developing countries are offering courses on various aspects of risk management. This trend needs to be encouraged. The activities of higher learning institutions, safety institutes and others that offer risk management training should be closely coordinated.
While much has been written about risk management in developed countries, very little has been written about it in developing countries and even less has been written by knowledgeable persons from developing countries.
Academic, training and industry personnel in developing countries could contribute greatly to the promotion of risk management by conducting research in this area and publishing the results.
In Europe, the Federal Republic of Germany has for a long time given consideration to the principles of risk management in universities involved in the sciences and technical areas.
More recently, other European universities in the United Kingdom, Switzerland and elsewhere have increased their offerings. The professional qualification route is the normal means by which people have sought formal qualification in risk management.
In-house education and training in risk management are almost non-existent in many companies as the risk management department will be very small and regarded as a specialism reserved for internal audit and finance professionals.
Further, there is very little international collaboration among those involved in risk management education. The result is that there is no recognised standard for such education and this must be a concern if we are striving after corporate recognition of and acceptability for risk management.
As companies and organisations face increasing regulatory pressures related to issues such as cybersecurity, data privacy and ESG, and the potential risks, leaders realise that their organisations need highly skilled and versatile professionals that enable the organisation to make quick decisions and execute appropriate and effective responses to risk.
As risk management gains ground and importance worldwide, the institutions in Kenya should evolve by creating risk professionals through a well-tailored and practical curriculum that will enable them to provide risk advisory services to the various sectors of the economy.
I believe that risk management should be a mandatory part of studies at the tertiary and higher levels along with environmental management and financial literacy because they are bound to impact all of us at some time or other and the only way to handle them is like a Boy Scout—be prepared.
Internal audit & risk manager at KenGen. [email protected]