The top 50 faces of operational risk

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					top 50 faces

On its 10th birthday, OpRisk & Compliance celebrates the achievements of those
who have helped make the operational risk discipline what it is today

The top 50 faces
of operational risk
     t’s not very often that a magazine gets to cele-                                                                  included in the view of some people. Others might
     brate such an important anniversary, and at                                                                       simply wonder at the Warhol-inspired cover art. But
     OpRisk & Compliance we feel that, because                                                                         we hoped to create an edition that our readers would
this event coincides with some truly remarkable                                                                        enjoy repeatedly and find useful as a reference tool.
happenings in the financial services industry, we                                                                         Of course, print media permits only a limited
have a unique opportunity to use 2009 as a year                                                                        amount of space for interviews, and some of the
for reflection and introspection, as well as a year for                                                                individuals who were included in the 50 faces were
progression and pushing the boundaries forward.                                                                        kind enough to give us quite a bit of their time
   We wanted to begin the year with a look at the                                                                      and attention. So we will also be making available
people who helped shape operational risk as a disci-                                                                   extended transcripts of the interviews undertaken
pline. It made sense to us to hear, in their own                                                                       with several of those profiled in the main magazine
words, about their own professional journeys and                                                                       – for subscribers only – so keep an eye out for these
how they feel the discipline is shaping and reshap-                                                                    on
ing itself.                                                                                                               Over the remainder of 2009 we will be rolling
   How did the editorial team at OpRisk & Compli-                                                                      out a programme of other anniversary events – in
ance select the ‘50 faces of operational risk’? It wasn’t                                                              the magazine, in person and online. We will be
easy. We reviewed the past issues of the magazine, as                                                                  celebrating how far operational risk has come, but
well as a variety of conference programmes, books                                                                      we are also looking to help move forward the debate
on the subject, and other materials to see who the                                                                     about where the discipline can go and how it should
thought leaders were. We also spoke to people in the                                                                   evolve, particularly in the current exciting and chal-
industry over the course of 2008 to see who they                                                                       lenging environment. For example, in the March
thought deserved recognition – although we tried                                                                       edition we will be announcing lifetime achievement
to be careful not to let the cat out of the bag about                                                                  awards for organisations across a number of cate-
the top 50 faces project itself.                                                                                       gories, and providing an editorial retrospective on
   Certainly there were people who have been in                                                                        how operational risk developed from the early days
the discipline since day one – figures such as JP                                                                      through the present. In April we will also be host-
Morgan’s Joseph Sabatini and the US Fed’s Roger                                                                        ing a special 10th anniversary dinner to hand out
Cole spring to mind immediately – but others,                                                                          these awards in London. Later in the year, we will
such as RiskBusiness’s Mike Finlay, Oracle’s Peter                                                                     be producing another special edition of the maga-
Hill and Towers Perrin’s Ali Samad-Khan also have                                                                      zine, where we will be seeking essays from you, our
played pivotal roles. We tried to strike an even                                                                       readers. We are also hoping to produce a series of
balance between regulators, financial services execu-                                                                  webinars this year focused on operational risk and
tives, industry group organisers and thought leaders                                                                   the important issues the industry is debating.
from software companies and consulting firms.                                                                             So find a comfortable chair and enjoy this special
   In the end, we had a list of almost 100 candidates                                                                  edition of OR&C. We’d love to hear your thoughts,
and we had to whittle down the top 50 over several            We are sure this list will be controversial – inevita-   suggestions and feedback – please send any comments
days of debate and discussion.                              bly names were left off that perhaps should have been      to myself at

Reprinted from OpRisk & Compliance                                                                                                                     www.
 January 2009
 Reprinted from


                                Penny Cagan’s decade developing the Algo FIRST            to sell the importance of managing operational risk
                                database, composed of loss events as reported in the      throughout the organisation,” says Cagan. “An op
                                world’s media, has contributed immeasurably to            risk executive who is too much of a technocrat is
                                industry acceptance of a case study-based approach        doing the organisation a disservice if important risks
                                – as well as overall use of historical information to     are not communicated in language intelligible to
                                understand loss trends. “I pushed very hard for a         senior management, business managers and peers in
                                more qualitative and balanced approach to managing        other risk, governance, and compliance disciplines.”
                                operational risk,” says Cagan. “The user community
                                of the Algo FIRST database has grown over the past
                                10 years into almost 100 institutions and I feel very         “I would like to see the industry
                                privileged to have been a part of this.”
                                                                                             move towards more of a portfolio
                                   Her work on Algo FIRST began in 2000 at Zurich
                                Financial Services and has continued at Algorithmics,      approach to allocating capital, where
                                part of the Fitch Group, since 2003. Overall, she can      organisations determine risks across
                                boast more than 20 years’ experience working in risk.         the enterprise based upon best
                                At Zurich, she also served as head of research and
                                vice-president, and before that was chief research            practices rather than risk type”
                                officer for the North American division of Deutsche
                                Bank’s business information centre. She also spent 12
Penny Cagan                     years as head of research for brokerage PaineWebber
                                and before that headed research at Capital Market
                                                                                             Cagan believes there is much further to go. “I
                                                                                          would like to see the industry move towards more
                                Risk Advisors. Earlier this year, her mandate at          of a portfolio approach to allocating capital, where
Managing director and head of   Algorithmics was expanded to integrate both credit        organisations determine risks across the enterprise
research, Algorithmics          and operational risk research.                            based upon best practices – internal ratings, scenarios,
                                   Operational risk might be evolving rapidly,            self assessments – rather than risk type,” she says.
                                but according to Cagan there is no room for               “This would allow organisations to determine where
                                complacency. “An operational risk executive is            to allocate their risk budgets by actual risks rather
                                essentially a sales person for the discipline and needs   than the standard three types of risk.”

January 2009