Stop hiding behind the foliage

EDITOR'S LETTER

The audience roared with laughter - many I suspect are familiar with the backsides of their own potted plants. Operational risk executives see much from behind their modest foliage. But it's a rare organisation that has a Gilda, ready and willing to champion the cause of the operational risk executive.

Both the conference, and New York, was full of stories of operational risk executives who tried to point out the problems with certain mortgage origination processes, with certain structured products businesses, with levels of concentration in certain markets. Just as Europe is full of newspaper articles about how Société Générale's internal audit team were not empowered enough to demand answers to its concerns about some of the firm's trading activity, or question the controls the firm had in place.

Op risk executives feel that their place should be equal to credit and market risk. But they are painfully aware that it is not. They are not paid the same magnitude of compensation. They don't get the same-size budgets for technology, consultants, or staff.

But like the terrified Zweibel, these executives know they have something to contribute. Zweibel turned up for the SNL job interview with something like 1,200 jokes hand typed (this was the 1970s). He knew he had the talent - he just needed a break.

It's the same for operational risk. The industry knows it has a lot to contribute, as long as the discipline is not relegated to one side as a compliance exercise completed. Box ticked.

I've been harping on for some months now about how important it is for operational risk managers to seize the initiative today. To make it plain that rogue trading doesn't need to be a regular event, and that mortgage fraud is, to a great extent, preventable. Operational risk can change the world. It just needs the chance to show what it can do.

Ellen Davis