Presented to
The 12th National Conference of
Practising Company Secretaries
15th July 2011
Presented by
Mr. S. N. Ananthasubramanian
Practising Company Secretary
There are “known knowns”.
[These are things we know that we know.]
There are “known unknowns”.
[That is to say, there are things that we know we don't know.]
But there are also “unknown unknowns”.
[There are things we don't know we don't know.]
- Donald Rumsfeld – Secretary of State US
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What are Unknown Unknowns ?
The etymology of the word “Risk” can be traced to the Latin word
“Rescum” Meaning Risk at Sea or that which cuts.
Risk in colloquial parlance is “chance of disaster or loss”.
and
Risk Management is the identification, assessment, and
prioritization of risks followed by coordinated and economical
application of resources to mitigate, minimize, monitor, and
control the probability and/or impact of unfortunate events or to
maximize the realization of opportunities.
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“The first step in the risk management
process is to acknowledge the reality of risk.
Denial is a common tactic that substitutes
deliberate
ignorance
for
thoughtful
planning.”
- Charles Tremper
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Risk Management - Professional Perspectives
Risk of Obsolescence / Irrelevance
 Velocity and Volatility of Change
 Multiplicity of Regulators.
 Innovation as a means of differentiation
 Scramble to be the First Mover.
 Technology making us Dinosaurs?
“Innovation distinguishes between a Leader and a
Follower.”
- Steve Jobs
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Risk Management - Professional Perspectives
Risk of Reputation/ Association
 Reputation
• Value that cannot be Valued.
• Valuation that cannot be determined.
 Association
• Professionals are known by the Companies with which they are
associated.
• Careless Association may lead to collateral damage to ones
reputation, as also bad debts.
• Stronger and wider media intervention.
“The only thing worse than being talked about is not being
talked about.”
- Oscar Wilde
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Risk Management - Professional Perspectives
Risk of Deregulation




Control to Regulation to Deregulation and self-regulation.
From Approval to Oversight.
Simplification of the language of regulations.
Stress on surveillance, enforcement and immediate follow-up
action of the Regulator.
“What we learn from history is that people don’t learn
from history.”
- Warren Buffett
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Risk Management - Professional
Perspectives
Risk of Miscommunication/ Interpretation
 Contractual Terms without safe guards.
 Improper Regulatory filings.
“The major difference between a thing that might go
wrong and a thing that cannot possibly go wrong is
that when a thing that cannot possibly go wrong goes
wrong it usually turns out to be impossible to get at or
repair.”
- Douglas Adams
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Risk Management - Professional Perspectives
Operational Risk





People, Processes and Systems
Frauds, Lack of Integrity
Firm Values
Chosen areas of practice.
Cyber Risk – Information security and data protection.
“What we think, or what we know, or what we believe is, in
the end, of little consequence. The only consequence is what
we do.”
- John Ruskin
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Risk Management - Professional Perspectives
Risk of Perception





Image v/s Reality.
Intangibles v/s Tangibles.
Brand v/s Commodity.
Authenticity v/s Visibility .
Conviction v/s Compulsion.
“There are things known and there are things unknown, and in
between are the doors of perception.”
- Aldous Huxley
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Can We Manage Risk ? May be
•
•
•
•
•
•
•
Identify and Assess
Measure & Analyse
Evaluate, Rank & Prioritise
Learn to Manage
Stay ahead of the Curve.
Follow the Masala Box Principle and
Take out a D&O Policy.
“There ain’t no such thing as a free lunch.”
- Robert A Heinlein
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And Finally…..
“Who dares Wins.”
- Motto of the British Special Air Service
And
“Who dares to Lead by Managing
Risk Wins All.”
- SNA
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Thank You
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