Renato CastilloFor Renato Castillo, senior vice president for Risk Management of First Gen Corporation and chief risk officer of First Philippine Holdings Corporation, risk management is everybody’s responsibility. His role is to make every person aware of the risks in his or her respective assignment.
“Once awareness is there, the next challenge is to ensure that risk mitigation measures for each identified risk are properly implemented and monitored,” says Castillo, a De La Salle University accounting graduate who gave up his dream of becoming an external auditor in favor of a rewarding banking career that he would enjoy for 36 years.
His long experience in banking was a big help as he began setting up the risk management system in First Gen in 2011.
Applying risk management principles
“Risk management is very advanced in the banking industry. Because of the kinds of financial instruments being issued, banks are exposed to a lot of market and credit risks. There are plenty of regulatory requirements relating to the management of these risks. I am applying the very same principles of risk management, except that in First Gen the bulk of risk covers operations and some market risk,” Castillo explains.
He believes the culture of risk awareness has grown in First Gen over the last four years. His team’s next step is to measure the risks as part of an enterprise resource planning or ERP system.
For Raymund Miranda, chief strategy officer and concurrent chief risk officer of ABS-CBN Corporation, his main challenge is raising awareness for risk management and the risk factors associated with ABS-CBN’s growing business ventures. ABS-CBN is close to completing its enterprise-wide risk management framework together with its consultant, SGV & Co.
‘A job for all’
“There are many kinds of risks: safety and hazards, security, reputational, regulatory, compliance, financial. All need a voice at the table. My role is to elevate the profile of risk management until it is ingrained in the DNA of the company. It is important for everyone to be aware of the risks, to think about the risks and to mitigate them. Risk mitigation is a job for all—big or small,” says Miranda, who worked for 11 years in Singapore before joining ABS-CBN in 2012.
He believes that successful risk management is a sustainable advantage. It is about making everybody aware of risks, and making tools and a framework available for risk mitigation, for example, through training and exercises or drills.
Meanwhile, Dr. Ted Esguerra, disaster and crisis lead at Energy Development Corporation (EDC), is developing an emergency response team that can “perform with precision, speed and decisiveness.” He served with the Coast Guard for 10 years, his last assignment being officer-in-charge of the Specialized Medical Assistance Response Team or SMART, an elite rescue team for which his subspecialty courses in urban and wilderness rescue, aviation medicine, expedition medicine for tropical and alpine mountain operations, tactical medicine and disaster management were put to good use.
Shifting to corporate life beginning in 2014, Esguerra has prioritized emergency response training, including equipping his fellow employees with basic survival knowledge, from what to put in go bags to how to protect oneself in case of fire, flood or earthquake. His main objective is to have zero casualties, “beginning with EDC and all the families of Lopez Group members.”
While Esguerra does not relish having to play God, for example, in choosing who to rescue first as was the case when typhoon Yolanda hit the country when he was still with the Coast Guard, he believes limited resources leave his team with no choice. However, people who are prepared will have a greater chance of survival, assuming help does not arrive at all.
Acknowledging that disaster response is an integral part of corporate risk management, Castillo has this message to LopezLink readers: “I am really impressed with the way the whole Group works. During Yolanda, I saw ABS-CBN Sagip Kapamilya and EDC work together to ensure that end goals of helping communities are carried out. That is not something you rehearse, it happened because that was what was needed. And it’s something the Group does, not for public consumption. Other conglomerates gained media mileage from their efforts. For us, the goods reached the recipients with no media publicity. We were active in building schools and classrooms, but we stayed quiet about it until they were actually turned over. I am proud to be part of an organization which really reaches out to the communities that it serves.”
Mind-set of preparedness
Miranda says: “We have to accept that there will always be some risk. It is part of business. In certain business cases, innovation and risk-taking are even encouraged and these involve risks. We cannot conduct business on the basis of risk avoidance. We must seek a balance between being too paranoid and being too complacent. There are of course synergy opportunities across the whole Lopez Group. We saw this at work when EDCdesigned schools became the standard for Sagip Kapamilya efforts post-Yolanda. The OML Center has a lot of research that can be used for the Group and for dissemination to the public through ABSCBN.”
Esguerra wants to inculcate the mind-set of preparedness.
“I want every Lopez Group employee to find his worth. Know your worth. Know the value of your children, your mother, your father. Because unless you know your worth, you will not prepare. How much are you and your family worth? That is what you must invest to protect yourself and them. We agree that safety, security and survival are priceless. But if you can imagine a number you can put on that, then you will know how much you must prepare for the unexpected. Prepare your children, train them, teach them. Teach them to be aware of their environment. Teach them to be the sheepdog, and not the sheep. The sheepdog survives because it can fight. The sheep will be killed by the wolf, which is the metaphor for the disaster or emergency at hand.” (Store/Photo: By Carla Paras-Sison)