http://riskcenter.com/story.php?id=13964
Operational Risk - Challenges Facing Contemporary Corporate Defense Location: New York Author: Sean Lyons Date: Tuesday, December 12, 2006 Contemporary Corporate Defence The core objective of contemporary corporate defence is to defend an organisation from a multitude of threats and vulnerabilities.[1] To this end each organisation has already implemented a variety of what could be best described as corporate defence related activities. Each organisation will have its own structures in place to address the management of defence related activities in their broadest terms. Unfortunately very often those entrusted with the management of these activities are not always in alignment with one another, as a variety of individual activities may be in operation simultaneously. These activities are frequently of a specialist nature (e.g. Compliance, Intelligence, Security and Assurance etc), with certain elements within these activities actually requiring a very precise expertise (e.g. SOX Compliance, Data Mining, Network Security or Forensic Accounting etc). For this reason they often tend be fragmented, disjointed and operating as discrete functions in isolation (e.g. in silos), thereby creating vulnerability, and reducing their potential for overall effectiveness. Each of these activities represents an important link in the chain to help organisations defend against internal and external threats, however the situation represents an asymmetric challenge, as each individual link must be defended, for it is the weakest link which is most likely to be exploited. For corporate defence to be effective it must incorporate all of these activities in a co-ordinated and systematic manner. In order to achieve this holistic solution to corporate defence, the symbiotic relationship which exists between these activities must be understood and fully appreciated. Corporate defence requires a strategic outlook, and the convergence and alignment of a number of existing activities under the one umbrella. An evolution in cross-functional convergence In recent years this imperative[2] appears to be at least partially recognised, with the emergence of a number of cross-functional initiatives including the following: * GRC Management (including governance, risk & compliance) * Integrated Intelligence (including business intelligence & knowledge management) * Unified Security (including physical & logical security) * Enterprise Resilience (including business continuity & protection etc) While this evolution is considered to be progressing in the right direction, a further transformation is still required. Unfortunately in many cases the progress to date has simply led to the creation of even larger corporate fiefdoms, with their associated power struggles and turf battles. Using advanced technologies however it is now possible to consolidate a sustainable fusion between these activities, and eliminate any disconnection or ?chinese walls? which may previously have existed. What needs to be created is a cybernetic loop whereby communication includes multi-dimensional feedback, both top-down and bottom-up, as well as operating in-depth horizontally, at every level within the organisation.This difficult challenge requires a flexible approach, and a strategic agility which will allow the organisation to quickly adapt to an evolving environment, and enable it to react in a speedy and integrated manner, to incidents which occur in an ever-changing set of circumstances. A successful integration program should involve understanding the complex interdependencies and correlations which exist between the various defence related activities, in order to avoid unnecessary duplication, omission or conflict. Effective enterprise-wide vulnerability and threat management requires co-operation from all of these activities. The task facing Corporate Defence Management (CDM) To do this effectively all activities need to be operating in unison with a common set of objectives, and with corresponding performance expectations. The task of CDM involves the consolidation of all defensive activities, including the alignment of a multitude of interrelated domains.[3] CDM must be all inclusive in order to be effective, as to be truly holistic it must include collaboration from Front, Middle and Back Office activities. This management, co-ordination and supervisory role relates to a diverse group of disciplines, and people as individuals, with a diverse set of knowledge and skills. It also relates to diverse processes, systems and technologies. This task of integrating and co-ordinating all of these activities demands astute political insights and subtle communication skills from those entrusted in this role. Fundamentally it requires all parties involved to be working together in a positive and proactive manner. Cross-functional challenges CDM by its very nature must be considered a cross functional discipline as it seeks to unite a number of discrete functions within the organisation. This means that it faces unique challenges as it needs to address the diverse points of view and expectations of several partners, each of which will have their own independent objectives and strategies. The challenge will be to develop a mechanism to ensure that these diverse functions are in a durable alignment with a common set of objectives and expectations. The CDM role will need to work closely with each of these functions, individually and collectively, to help ensure all are operating in unison. The partnership alliance must consist of the appropriate positions and individuals within the organization, in order to get the requisite buy-in and support. The importance of ?on the ground? involvement and commitment cannot be overly stressed as it is essential to the successful implementation of a corporate defence program. Clear reporting lines and delegations of authority must be in place from the very outset. Extreme care must be taken to ensure a clear understanding by all, and to avoid any possible misinterpretations or ambiguities. This will enable the required timely decision making, by appropriately delegated individuals. Sufficient time, effort and resources should be employed in the areas of education and communication, in order to ensure that a clear and consistent message is communicated to all concerns on a timely basis. Finally, a successful corporate defence program requires that all of the partners in the alliance are operating within a framework of collaboration and with a spirit of co-operation. [1]See ?Corporate Defence: Are Stakeholders Interests Adequately Defended?? ? Sean Lyons - RiskCenter.com [2]See ?Why Corporate Defence Management (CDM) is a Strategic Imperative? ? Sean Lyons ? RiskCenter.com [3]See ?An Executive Guide To Corporate Defence Management (CDM)? ? Whitepaper ? Sean Lyons ? RiskCenter.com Article Printed From RiskCenter.com +++ -------------------------- Want to discuss this topic? 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