Having the right stuff to do the right thing

Perhaps it was RMA that brought the rain to Anaheim after all. Wherever two powerful forces collide there's bound to be some reaction. In this case, carefree Disneyland collided in November with an impressive group of bankers who were dead serious in their intent to get everything possible from RMA's Risk Management Conference--from the hot-topics program to RMA's vast networking opportunities. We saw greatly increased interest also in the pro-conference credit risk policy round tables as well as the preview of RMA's Credit Risk Certified program and new courses. The evaluations indicate that this conference met and surpassed expectations, and I'm sure some of the positive feedback stems from the fact that we attracted top-notch and particularly dynamic speakers, including the chief risk officer from JPMorgan Chase and the chief economic officer from Wells Fargo Bank--heavy-hitters with heavy-hitting messages. This issue of The RMA Journal spotlights several scenes from this conference, and I hope you will be inspired to join colleagues committed to excellence in risk management at next year's Risk Management Conference in Washington, D.C. By the way, as you'll see in this issue, we did manage to have a little fun, too.

Nearly every economist believes the U.S. economy is on the mend and in fairly good shape. In the next breath, however, we hear warnings about the overstretched consumer and questions about how long we can expect continued support from this critical facet of the economy. Indeed, concerns about the consumer are coming from economists within all realms of financial services--it's not just a retail portfolio issue anymore. As Susan Hudson-Wilson said in her address at the Risk Management Conference, a lot of the future economic gains or losses depend on bankers and on their institutions' credit policies and procedures. We hold the future of the credit cycle: That's a sobering thought, or at least it should be.

Each month we move further away from the nadir of the business slowdown in 2002. And each month we hear louder refrains of "The pressure to increase earnings is putting the risk management folks in conflict with business developers." It takes a close, ongoing partnership of these two areas to foster understanding of the role each plays in "achieving the achievable" enterprise objectives. Whenever one side or the other feels the need to crank things up or down a notch, the wisdom of Goldilocks should come to mind: not too hot, and not too cold. When the bears came home, Goldilocks took off, but we can assume she retained her beliefs in her next adventure; it's a good idea for us to do likewise.

Recent disclosure and allegations of deceptive pricing practices in the insurance and insurance-broker industries underscore the importance of full disclosure with clients in all areas dealing with fees, interest rates, commissions, and all components that go into pricing. This may be a good point at which to add my own adage: "You're as guilty as your secrets." More and more, it seems a case of "when" rather than "if" secrets are being held, by institutions and their clients alike. Some of these secrets are hinted at in the footnotes of financial reports, but it's our job not only to uphold full disclosure at every level of our institutions, but to expect the same of our customers.

Much of what I've talked about in the last three paragraphs comes down to ethics. We've learned that ethics begins at the top but its power is gone if it is not reinforced at every level of an organization. As another speaker told us at the Risk Management Conference, exemplary ethics by top management falls flat on its face if sloppy accounting exists within the organization or if strong ethics is not reinforced daily as part of an institution's culture. We are an important part of sustained economic growth. Let's make sure we have the right stuff to do the right thing.

Maurice H. Hartigan II RMA President and CEO

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