If you can't stand the risk ��

With greater consensus that the world is several decades into global warming, we should all be used to "feeling the heat," although the heat we're feeling is being brought to us by Mother Nature and our regulators. And after years of sweating through mergers and consolidations and trying to do more with less, I guess it should come as no surprise that we've shrunk liability, to a four-letter word.

As risk managers, we look at various risk/reward equations and decide when to forgo the reward to avoid a major burn. Managements at many smaller accounting firms, acting in a similar manner, are dropping their public corporate clients like hot potatoes to avoid registering with the Public Company Accounting Oversight Board and preparing for intense scrutiny and possible harsh discipline for red flags they didn't see while performing audits. Some, mostly larger, firms have chosen to stand the heat and are sinking resources into ensuring they meet the new rules. Others are waiting it out a bit to see where the dust settles. The implication for risk managers is profound if the result of this uncertainty is that their clients are unable to produce audited statements.

As bankers, we can empathize. A number of us have been burned--either by our customers or even by our own employees. But risk is our business, and we had better be prepared for fingers pointing at us when something goes awry. There's a reason why so many institutions are now bringing in chief risk officers, and it's not just to make our customers feel more comfortable. We are expected to keep pace--and then some--with dizzying change. You, as Associates of RMA, are in the vanguard of this increasingly intense focus on risk. Reading The RMA Journal, joining in discussions of hot topics during our audioconferences, having eMentor[SM] at your workstations, attending such courses as RMA's new Operational Risk 101, participating in your chapter's activities, joining your peers from throughout the world at RMA conferences--all of these endeavors strengthen your ability to "stand the heat" by better understanding it.

As you read this, you may also be participating in RMA's 2003 Risk Management Conference (October 5-7). You may be asking a question of Amy Woods Brinkley, chief risk officer for Bank of America, or Phillip Humann, chair of SunTrust Banks, after their keynote addresses. Or you may be gaining insight from Alice Rivlin, former vice chair of the Federal Reserve Board and economist for the Brookings Institution. Or you may be learning from your very experienced peers addressing all the issues you deal with on a day-to-day basis.

Suzanne Labarge, chief risk officer and vice chair at Royal Bank of Canada--and your new RMA chair--visited our offices in August to learn more about our daily activities. She believes that RMA is the finest association of its kind. Hearing those words from one of today's top risk managers helps affirm RMA. She has been an active participant for years, and we are very proud to have her as our chair this year.

Effective risk management brings liability back to manageable size and is nothing short of critical to your institution's success. Use RMA. Participate. Learn. Share. Grow. We won't let you down.

COPYRIGHT 2003 The Risk Management Association
COPYRIGHT 2005 Gale Group