One of the year’s most important business books is ‘a roller-coaster ride’ about risk management.
Updated: Nov 12, 2021
This article initially appeared on The FCPA Blog, here and is reposted with the permission from the editor and publisher.
I spoke recently with Richard Fenning, the author of What on Earth Can Go Wrong: Tales from the Risk Business. He’s the former global CEO of Control Risks. His book was named by the Financial Times as an FT Summer book of 2021.
Lord Sedwell, former UK Cabinet Secretary and National Security Adviser, praised the book’s “fascinating insight into the space where politics and business meet, filled with wit and wisdom.” Sir Sherard Cowper-Coles, former British Ambassador to Israel, Saudi Arabia and Afghanistan, described the “beautifully written memoir” as “a roller-coaster ride of risk, full of insights and implied advice, more relevant than ever in today’s uncertain world.”
Richard, what inspired you to write about your journey “into the deep recesses of the risk and security business”?
I have always enjoyed writing and felt I might have a book in me although I never intended to write the quasi memoir I ended up writing. I also wrote a CEO blog over the many years I ran Control Risks. When I retired from the firm and allowed myself a year off, it seemed like the natural thing to do. Of course, it then turned out to be infinitely harder than I anticipated! When I had time to look back on my career at Control Risks I realized that maybe I did have a few things to say – more so than when I was head down fully immersed in the daily challenge of running a firm like that. I am thrilled you enjoyed it. As a first-time author, it is really gratifying – and still slightly surprising – that people enjoy what I have produced.
There’s a lot of focus today on “data, data and data.” From your experience, how and where does data fit in, with respect to understanding, appreciating, and mitigating risk?
Data without informed intuition is useless and vice versa. We have made great strides in our use of various analytics tools that can spot anomalies faster and more accurately than fallible human beings can. But these advances cannot obviate the need for pathologically suspicious, deeply skeptical human beings who can sense when things are not as they should be.
Brazil’s journey from corruption to good governance seems to be traveling in peaks, valleys, and sometimes in downward slopes How would you counsel a multinational approaching such an important market?
Anti-corruption in Brazil is a bit like feminism used to be in Australia: it grabs global attention because there is such a mountain to climb. Lava Jato and the movement it spawned may have been blunted by the political machinations of the Bolsanaro regime but that original groundswell of public anger was authentic and will bounce back with a vengeance at some stage.
Brazil is not the most corrupt country in the world and investors should not be deterred by what they may have read. Enormous care and diligence is of course required along with a willingness to walk away if corruption proves an absolute barrier. And don’t be seduced by the “that’s just how things are done around here” excuse. It doesn’t need to be true.
What would you say to someone trying to navigate a tricky course as honestly as possible in countries with known corruption problems?
It is about getting the power balance right between those people in your organization charged with spearheading commercial success and those tasked with ensuring integrity and good governance. They can happily coexist up to a point. But at some stage you need there to be tension and the occasional armed conflict between your business development teams and your legal counsel. If it is always sunshine and happiness then something has gone profoundly wrong.
You describe how in the corporate world bribery can be camouflaged to the point where “no average jury has a clue what has happened.” Are prosecutors and investigators keeping up with the pace of disguise?
In some ways it is the lot of the regulator to always be fighting the war that has already finished. Inevitably, regulators are under-funded, under-staffed and at times lacking the moral fire in their belly to be truly effective against well-heeled perpetrators. Combating corruption is a bit like combating climate change. We can make great strides at a national level and be proud of what we have done. But ultimately we need global cooperation. It doesn’t need to be perfect or completely comprehensive – more a coalition of the willing that over time marginalizes the deniers, unrepentant and lethargic.
In your book, you warn companies not to “become the unwitting participant in somebody else’s power politics.” With China in mind, for example, is the risk of getting caught in the political crosshairs a big problem?
It is. Anti-corruption can be a smokescreen for all kind of nefarious political advantage seeking and point scoring. Wise investors tread carefully and keep their senses alert for what might be lurking just below the surface. But often good things come about as a consequence of less honorable motivations. Even where the anti-corruption agenda has been hijacked by greedy self-interest or a partisan political agenda some positive change may be sparked into life as awareness among civil society is heightened.
Companies today face new pressure from ESG and CSR issues, on top of traditional regulatory, shareholder, and stakeholder expectations. Can they meet everyone’s expectations?
Only in fairy stories, I am afraid. The modern business agenda is a series of trade-offs, at least in the short term. Running businesses that are carbon-neutral, sustainable, socially equitable and do no collateral harm to anybody is what we should all strive for but equally we should not be fooled that it will not involve additional cost, lost opportunities and some difficult choices. But that is the stuff of leadership.
Thank you, Richard, for sharing your experience and perspective.
Richard Fenning’s What on Earth Can Go Wrong: Tales from the Risk Business is now available from Amazon.