Presenting the pioneering work on risk management, FICCI and Global Risk Management Institute (GRMI) have invited stakeholders’ comments on the draft Risk Code, which was released recently. The Risk Code is aimed to be a practical playbook for the Indian industry with effective enablers for implementation of risk management practices so that organizations can take bolder, faster, risk-intelligent business decisions.
The Risk Code is intended for listed companies, public unlisted companies, private companies, start-ups, not-for-profit organizations, societies, trusts, as well as MSMEs and start-ups, for which the implementation of risk management practices is nuanced due to their dynamic nature of business, varying maturity levels and risk appetite. The Risk Code would be especially useful for the sectors witnessing multi-dimensional disruption across technological, demographic, financial and other external aspects.
The Code focuses on the following key aspects:
- Relevance of Risk Code – why it is imperative for organizations to adopt the Risk Code
- Principles of Risk Code – the key principles around which the Risk Code is structured such as Strategy & Leadership, Risk Embracing Culture, Ownership & Empowerment, Resources & Structure, Communication & Reporting, Governance & Oversight and Risk Data & Information Repository
- Implementation Guidelines – guidance for Board of Directors, Risk Management Committee, CEO, and CXOs
Against the background of evolving spectrum of risks, be it industry-specific risks, strategic, ESG, operational, reporting, competition, people, reputational, compliance, physical security, data privacy, or business continuity risks, there is general consensus that being ‘risk intelligent’ offers competitive advantage to organizations; however, not having robust risk management practices often leads to an existential crisis.
Underscoring the value that can be derived through implementation of risk management practices, FICCI and GRMI had collaborated to develop a ‘Model’ Risk Code for Indian industry that guides business for effectively managing risks in all segments of business. The Code is painstakingly developed by a dedicated Task Force on Risk under the chairmanship of Mr M Damodaran, Chairperson, Excellence Enablers and former Chairman, SEBI; and would guide businesses to develop effective enablers for practical implementation and benefit from making risk-intelligent decisions, not only dealing with risks but also optimizing risks.
The Risk Code will be released by the end of this year after incorporating feedback received from the stakeholders.