INTHEBLACK August 2022 - Magazine - Page 47
“Risk is really a human concept. It
is only when risk intersects with
people directly or indirectly that
we become motivated to act.”tivated
LISA SISSON, UNEARTH
Lisa Sisson, Unearth
sectors are constantly innovating new products that
help bring certainty.”
However, uncertainty will always be with us,
Tang says. He points to the words of the late, iconic
scientist Stephen Hawking, who said uncertainty
must be embraced, that the 21st century would be
characterised by complexity, not by clarity, and that
intelligence is the ability to adapt to change.
Amy Grace CPA, EY’s Oceania risk leader, agrees
that risk is a positive as well as a negative. She
says risk should be framed in three ways – upside,
downside and outside.
“Downside risk is the risk that you need to prevent
from coming to fruition,” Grace says.
“Upside risk in a business is the risk you’re willing
to take because the potential reward is great. Outside
risks are external factors that you may or may not be
able to control, but that you should remain aware of.
The pandemic is a good example of an outside risk.”
EY looks at risks across these three layers partly
because it makes the concept of risk more manageable,
and secondly because it resonates with C-suite
executives, but most importantly because it gives the
organisation a powerful competitive advantage.
“By developing an understanding of all three types
of risks in your organisation, you have that advantage
over competitors because you have a structured way
to manage risks, and also a strong understanding of
your business’s purpose and risk appetite,” Grace says.
“Risk happens every day in all of our decisionmaking across all layers of the organisation.
“Putting risk at front of mind with the leaders
of the business means we’re talking about risk all
the time, but we might not be framing it as risk. It
becomes about how we make the very best decisions.”
RISK IS ULTIMATELY ABOUT PEOPLE
Lisa Sisson, founder of risk consultancy Unearth,
has literally written the book on risk in business.
Risk Starts and Ends With People outlines how and
why people are at the heart of risk and opportunity.
“Risk is really a human concept,” says Sisson, who
intheblack.cpaaustralia.com.au August 2022 47