Human Capital Risk
Given substantial impact of Human Capital on performance and even survival of an organisation, Human Capital Risk (HCR) should be at the top of the list for the Boards to pay attention to. The discussion will focus on different approaches organisations take in identifying, assessing and managing HCR, and also exchange views on what is best vs common practice in addressing HCR in the industry.
Presented thanks to PRMIA London.
Since people are at the centre of all company’s activities, human capital risks can disrupt execution of both strategic and operational objectives of an entire organisation. Given substantial impact on performance and even survival of an organisation, Human Capital Risk (HCR) should be at the top of the list for the Boards to pay attention to. However, very often responsibility for this risk falls between Enterprise Risk Management (ERM) and Human Resources (HR) departments , which do not always agree on the impact and management of HCR.
The only way to ensure this risk is properly addressed is for businesses to take ownership of the human capital risks. Taking into account potential disruption of the business and inherent potential in monetary rewards if managed properly, companies should consider establishing formal HCR process with business ownership and participation, and having a standing group that oversees this process.
Questions discussed are as follows:
1. Do you agree with the above statement? Please explain your answer.
2. Is Human Capital Risk (HCR) on the agenda of your Board?
3. Where does responsibility for HCR reside in your organisation? Where do you think it should reside?
4. How do you assess the impact of HCR and how do you manage it?
5. Do you have a formal HCR process with business ownership?
Panel Participants
Terri Duhon, NED and Risk Chair Morgan Stanley International
Vicky Gray, Head of HR, gTech EMEA
Matt Sandoe, Chief of Staff for Risk UK and Global Lead on Climate Risk, BNP Paribas
Moderator:
Oleg Lebedev, PRMIA London Chapter, Co-Regional Director and Partner, Feel Good In Companies