“Yesterday’s the past, tomorrow’s the future, but today is a GIFT. That’s why it’s called the present.”

With the festive season in full swing and in keeping with the Dickens classic, A Christmas Carol, we will be exploring risk and its identification- past, present and future. Over the years there have been huge changes in how organisations approach risk and compliance and with the speed of change increasing year by year it will be very interesting to see what the future holds.

So, settle into your office chair, grab a mince pie whilst we use our expertise to tell you about the past, present and future of risk.

A Christmas Carol

For those who aren’t familiar, or have trouble recalling, the original Mid Victorian Dickensian plot is based on an ageing miser called Ebenezer Scrooge who is haunted by the ghosts of his former business partners. To teach mean Scrooge a lesson these ghosts send the spirits of Christmas Past, Present and Future to visit. After the paranormal encounters, Scrooge is transformed into a kinder, gentler man. The moral of the story – DON’T BE A MEANY!

In our adaptation, the past may cover the joys and authenticity of bucolic living and connection with nature. Juxtaposed with the very real danger of being mauled by a sabre tooth tiger whilst hunting for scarce resources. Or perhaps being plundered by marauding Vikings!

The vibrant Spirit of Christmas Present will offer a glittering view of digital transformation. Compliance and regulation founded on ABC (anti-bribery and corruption) tenets and the safeguarding of customers and employees. Whist nodding his jolly head at the risks of cyber and data security and the effects of COVID-19.

With the last chime of the clock, the Ghost of Christmas Yet to Come may allude to a future social transformation driven by sustainability, shifting public values and ESG commitments. Yet will ominously demand how we will deal with risks from a world in transition.

Risk Identification Techniques Past, Present, and Future

Risk initially has to be identified to be managed and methods of identification fall into three groups- past, present or future:

Past

A historic review assesses risks that have already occurred and compares them to other risks. This technique evaluates whether a previously identified risk might arise again. It relies on good data management to screen only relevant past risks and considers which external reference points acted as drivers. This approach is all about using previous experience to tackle an existing situation.

Present

Current assessments are based on what exists in the present. This technique demands a comprehensive understanding of the current situation and good quality diagnostics. Determined attributes are then scrutinised against models to reveal areas of uncertainty.

Future

Many approaches that try and identify future risks are based on predicting upcoming trends and conditions that will impact future objectives. See our article on What’s 2022 Got in Store. These techniques rely on creative, forward-thinking collaborative discussions with stakeholders to detect possible forthcoming risks. The success of future risk identification is driven by an ability to imagine the future and the involvement of multiple points of view, to offer a broader view of risk without missing anything.

‘I will live in the Past, the Present, and the Future!’

This is the phrase Scrooge repeats, as he scrambles out of bed the next morning, free from his apparitions. And the sentiment applies here too! Each type of risk identification approach, whether it is past, present or future has its strengths and weaknesses. No single method can be relied upon to expose all knowable risks.

So, like Scrooge, we must endeavour to incorporate all time perspectives – a combination of past, present, and future methods to inform risk identification. This is our Christmas wish for you!