Ridge Warns of Folly in Failing to Manage Risk
Former Homeland Security Secretary Addresses Annual Governance Conference
Oct. 2, 2008
Risk management is a double-edged sword, posing challenges but also offering powerful benefits, former Homeland Security Secretary Tom Ridge told a School of Management conference Wednesday.
“For business, as well as government, any organization that doesn’t manage risk is probably a pretty static organization,” Ridge said.
Organizations that handle risk poorly may be heading for a state of “atrophy,” Ridge said. Conversely, organizations that manage risk aggressively tend to be energized, competitive and strong, Ridge said.
The former member of President George W. Bush’s Cabinet topped the list of speakers at “Risk Management for Globally Interconnected Enterprises,” the title and theme of the school’s 2008 Corporate Governance Conference.
Sponsored by the school’s Institute for Excellence in Corporate Governance, the sixth annual conference featured top executives from around the country.
Ridge’s talk compared national security response capabilities to the business challenge of managing today’s volatile economy.
Ridge said that terrorism, natural disasters, criminal acts and accidents can have debilitating effects on economies and have put issues such as supply chain security, cross-border collaborations and security investment at the forefront of business and government agendas.
Risk cannot be eliminated, but it can be managed aggressively, he said.
“At the end of the day, if we manage risk, if government manages risk and business manages risk, our companies will be stronger and more competitive, and our country will be much stronger,” Ridge said.
As the country’s first secretary of the Department of Homeland Security, Ridge was the nation’s primary liaison in the international fight against terrorism.
He was Pennsylvania’s governor from 1995 to 2001 and has more than 25 years in public service. In 2007, he launched Ridge Global LLC, a global advisory firm that provides strategic and operational guidance to clients worldwide. He now consults on such issues as security, international relations, economic development and technology.
Joining Ridge on the conference program were two other keynoters:
- James C. Oberwetter, former U.S. ambassador to Saudi Arabia, who discussed risk factors and management in the Middle East and Central Asia.
- Dr. Reatha Clark King, director of ExxonMobil and former General Mills president and board chair, who discussed the impact of risk on global strategy.
Participants also heard presentations by Paul Dickerson, chief operating officer for the U.S. Department of Energy; Angelina Kwan, director and chief operating officer, Southeast Asia, Cantor Fitzgerald; and Jose Guimaraes Monforte, chief executive officer for the Brazilian Corporate Governance Institute.
In addition, a panel discussion featured Jeffrey Armitage, senior risk manager, Fannie Mae; Trent Gazzaway, national managing partner of corporate governance, Grant Thornton; Dennis McGuffie, vice president of Audit Services for Tenet Healthcare; Stephen Wagner, national managing partner of corporate governance for Deloitte and Touche; and Mary O’Connor, partner with Akin, Gump, Strauss, Hauer and Feld.
Click for a streaming video of Tom Ridge's address.
Aggressive risk management practices make businesses and the nation stronger, said former Homeland Security Secretary Tom Ridge.