A unique approach to risk
Managing risk is good business, but it’s also what our clients, people and regulators expect of us. Clients rightly expect businesses they deal with to implement effective risk management practices, as they seek to manage the risks within their own supply chain. Furthermore, we are convinced that the ability to identify, assess and manage risks associated with our operations in different markets is fundamental not only to our being a responsible business, but also to achieving success for our clients.
At Clifford Chance, we have a long-standing and mature enterprise-wide approach to risk management. In 2021/22 we embarked on a unique firm-wide programme to enhance this work further by introducing bespoke risk assessments for our regions and practice areas. Using the same methodology that we apply to global strategic risks, we are working with each of our regions and several practice areas to identify and assess the specific risks they face, assign ownership of them, and implement mitigation strategies using all available experience gained from operating in each specific market.
Our Africa Group is one of the groups across the firm to form part of this unique risk management strategy. In a series of workshops commencing in September 2021 led by our Global Risk team, the Group examined the risks particular to their business, drawing on decades of experience working in Africa and in diverse cases and transactions spanning 20+ jurisdictions.
Uncertainty in Africa’s continually evolving and dynamic operating environment, exposing the firm and our clients to potential financial loss, is an example of one of the strategic risks the Group addressed in detail. Key drivers of this risk include political instability and the diverse operating environment; however, our approach eschewed generalisations, focusing instead on the characteristics unique to the major jurisdictions in which we and our clients operate.
The Group has allocated responsibility and ownership of each strategic risk to members of their leadership team, which has ensured that mitigations and actions to reduce the risks are carried out. Lawyers and business professionals have embraced the approach, with responsibility for risk management in specific jurisdictions now involving colleagues across our practice areas and offices. The strategic risks, individually and collectively, present a lower risk profile than before and the continuous monitoring of, and response to, emerging risks is now a key element of the Africa Group’s strategy and processes.
“This exercise demonstrates the practical application of the firm’s enterprise risk management framework throughout our business,” says Bahare Heywood, Chief Risk and Compliance Officer. “Risk management doesn’t have to be overly complicated; what we have seen the Africa Group achieve by working with the risk team has been a really valuable exercise in collectively identifying, assessing and managing risks associated with their region and implementing a set of agreed actions to address any risks that were outside the firm’s risk appetite. Put simply – we now have a very clear plan of action and ultimately, that’s what managing risk is all about.”