Risk Insider: Lance Wright

The HR and Risk Management Nexus

By: | March 28, 2017 • 3 min read
Lance Wright is Partner and CEO at Lance Wright & Associates. He has decades of global business experience, with the bulk of his career spent as an international oil and gas executive. He can be reached at [email protected]

Business leaders, CFOs, risk managers and HR professionals should continually review how the organization approaches people-related risk management issues. Today, as part of their critical strategic business processes, successful organizations are constantly looking for ways to better understand the nexus between HR — the human resources of an organization — and effective risk management. Here is a quick review of the key things to consider.

Develop a cross function partnership.

An effective enterprise risk management program invariably focuses at some point on the big chunk of an organization’s financial resources associated with the pension, insurance, savings and other benefits plans that the HR function usually manages and administers. As a result, a partnership is developed in many organizations between HR, the finance organization and the risk management function to make sure that the risks associated with these HR plans and programs are well understood and properly addressed.

Advertisement




Continually rethink HR-related risks.

This cross function partnership makes sure that advancements in technology and computing power are used to identify, analyze, model and ameliorate not only the HR-related financial risks in the organization but also those that emerge from the behavior of people.  This continual rethinking of the HR and risk management nexus often leads to increased understanding of the events and actions that can impact, or be done by, the people in an organization.  From planning for pandemics to identifying and protecting against physical and information security vulnerabilities, forward-thinking organizations make sure there is a coordinated HR and risk management review process overseen by senior management.

Understand the insider threat.  

Well-run organizations that have been rethinking the HR and risk management nexus understand that the actions of its human resources, whether malicious or inadvertent, can represent one of the greatest potential risks to the bottom line. They understand and guard against the “insider threat,” the employee who may, for example, introduce a virus into an organization’s information system through an infected thumb drive. They know that even if unwittingly done, this sort of action by an employee can bring an enterprise’s operation to its knees.

Advertisement




Look for hidden HR-related risk issues.

Thoughtful organizations know that despite the progress they have made in rethinking the HR/risk management nexus, there are always seemingly people-related processes that in actuality are really about organization risk.  For example, many organizations think of succession planning and leadership development as solely an HR-related process.  However, progressive organizations that have been rethinking the HR and risk management nexus believe succession planning should be viewed as a process designed to prevent the risks associated with not being able to fill vacancies in critical positions with the right people. They seek out other so-called HR processes that may really deal with risk.

The continual review of the HR and risk management nexus is well underway in top-notch organizations. More organizations should follow suit.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

After 20 years in the business, Navy Pier’s Director of Risk Management values her relationships in the industry more than ever.
By: | June 1, 2017 • 4 min read

R&I: What was your first job?

Working at Dominick’s Finer Foods bagging groceries. Shortly after I was hired, I was promoted to [cashier] and then to a management position. It taught me great responsibility and it helped me develop the leadership skills I still carry today.

R&I: How did you come to work in risk management?

While working for Hyatt Regency McCormick Place Hotel, one of my responsibilities was to oversee the administration of claims. This led to a business relationship with the director of risk management of the organization who actually owned the property. Ultimately, a position became available in her department and the rest is history.

R&I: What is the risk management community doing right?

Advertisement




The risk management community is doing a phenomenal job in professional development and creating great opportunities for risk managers to network. The development of relationships in this industry is vitally important and by providing opportunities for risk managers to come together and speak about their experiences and challenges is what enables many of us to be able to do our jobs even more effectively.

R&I: What could the risk management community be doing a better job of?

Attracting, educating and retaining young talent. There is this preconceived notion that the insurance industry and risk management are boring and there could be nothing further from the truth.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

In my 20 years in the industry, the biggest change in risk management and the insurance industry are the various types of risk we look to insure against. Many risks that exist today were not even on our radar 20 years ago.

Gina Kirchner, director of risk management, Navy Pier Inc.

R&I: What insurance carrier do you have the highest opinion of?

FM Global. They have been our property carrier for a great number of years and in my opinion are the best in the business.

R&I: Are you optimistic about the US economy or pessimistic and why?

I am optimistic that policies will be put in place with the new administration that will be good for the economy and business.

R&I: What emerging commercial risk most concerns you?

Advertisement




The commercial risks that are of most concern to me are cyber risks, business interruption, and any form of a health epidemic on a global scale. We are dealing with new exposures and new risks that we are truly not ready for.

R&I: Who is your mentor and why?

My mother has played a significant role in shaping my ideals and values. She truly instilled a very strong work ethic in me. However, there are many men and women in business who have mentored me and have had a significant impact on me and my career as well.

R&I: What have you accomplished that you are proudest of?

I am most proud of making the decision a couple of years ago to return to school and obtain my [MBA]. It took a lot of prayer, dedication and determination to accomplish this while still working a full time job, being involved in my church, studying abroad and maintaining a household.

R&I: What is your favorite book or movie?

“Heaven Is For Real” by Todd Burpo and Lynn Vincent. I loved the book and the movie.

R&I: What’s the best restaurant you’ve ever eaten at?

Advertisement




A French restaurant in Paris, France named Les Noces de Jeannette Restaurant à Paris. It was the most amazing food and brings back such great memories.

R&I: What is the most unusual/interesting place you have ever visited?

Israel. My husband and I just returned a few days ago and spent time in Jerusalem, Nazareth, Jericho and Jordan. It was an absolutely amazing experience. We did everything from riding camels to taking boat rides on the Sea of Galilee to attending concerts sitting on the Temple steps. The trip was absolutely life changing.

R&I: What is the riskiest activity you ever engaged in?

Many, many years ago … I went parasailing in the Caribbean. I had a great experience and didn’t think about the risk at the time because I was young, single and free. Looking back, I don’t know that I would make the same decision today.

R&I: What about this work do you find the most fulfilling or rewarding?

I would have to say the relationships and partnerships I have developed with insurance carriers, brokers and other professionals in the industry. To have wonderful working relationships with such a vast array of talented individuals who are so knowledgeable and to have some of those relationships develop into true friendships is very rewarding.

R&I: What do your friends and family think you do?

My friends and family have a general idea that my position involves claims and insurance. However, I don’t think they fully understand the magnitude of my responsibilities and the direct impact it has on my organization, which experiences more than 9 million visitors a year.




Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]