Risk Management in 2022: Mitigating Risks from Nature and Managerial Failure


Uncertainty has Become the New Normal

According to the IMF’s World Economic Outlook, global economic growth is forecast to slow from 3.2 per cent in 2022 to 2.7 per cent in 2023. The same report predicts a one-in-four probability that global growth will fall below 2 per cent in 2023.

While the entire world had begun returning to normalcy at the start of 2022, the supply chains were hit by another challenge: the Russian invasion of Ukraine. This was followed by the slow output from China, resulting in rising prices and inflations. The stagflationary economic conditions in the US, China and Europe have further delayed the healing process of the post-pandemic financial scars. A recession seems imminent in several countries, with most significant economies witnessing two consecutive quarters of degrowth. The Federal Reserve recently said the probability of a US recession in 2023 had risen to nearly 50 per cent.

With zero COVID policy, fiscal miscalculations, and prolonged supply chain disruptions, confidence across the financial markets weakened in October. The only short-term respite arose from the expected peak in consumer demand during the festive seasons. A constant state of uncertainty with new and emerging risks has put the focus on risk management practices.

Preparing for 2023

As we approach the end of 2022, many organisations have begun budgeting and strategic planning for the coming year. Considering the current state of uncertainty, risk management needs to play an essential part in that strategic planning, says Johnny Kollin, Founder of Várri Consultancy.

“Companies and society have started seeing risks and risk management in a different light after experiencing the recent global pandemic,” says Kollin. “Strategic and financial planning is an important aspect of any business. At the same time, companies without a proper risk framework embedded in their organisations, and those without a sound risk culture, run the risk of overlooking all the things that can affect that strategy,” he continues.

The Role of a Risk Management Consultant

Risk management aims to identify risks and assess the likelihood of them occurring and the impact if they occur. By understanding the risks an organisation faces, management can decide the necessary response, for example, by implementing risk controls to reduce the likelihood or the impact. It is a well-recorded deduction that many corporate failings occur due to a lack of management accountability, strategy, and transparency. In these times of uncertainties, where regulators and stakeholders are relaying more demanding expectations, corporates and financial institutions are compelled to opt for better discipline, control, and responsibility.

Engaging an external consulting firm to provide risk advisory services can guide management in their business decision process. In these uncertain times, they can also support management in identifying and analysing alternatives for dealing with such risks and uncertainties. Várri Consultancy has seen interest from both startups and established companies to engage external advisors to either implement new or review existing practices.

Várri Consultancy is a UAE-based independent strategy and risk management consulting boutique. They are known for their timely and accurate consultations for organisations during challenging periods. One example of the companies Kollin refers to is a Dubai-based equity platform that invests in, develops, and operates renewable energy assets in the MENA region. The company engaged Várri Consultancy to conduct an exploratory workshop to identify broad risk themes and create management awareness of the company’s risks. With valuable outcomes from the seminar, Várri Consultancy was hired for a follow-on project to review and improve the company’s existing framework and policies. This credit risk and due diligence framework empowered the client to comply with the latest government regulations and streamline its investment decision-making process.

Várri Consultancy is founded by Johnny Kollin, an expert consultant with over fifteen years of experience in the banking and fintech sectors of Abu Dhabi, Dubai, London, and Stockholm. The company has won two awards at World Business Outlook – ‘Leading Strategy and Risk Management Consulting Boutique in the UAE 2022’ and ‘Leading FinTech Risk Management Boutique in the UAE 2022’. They won the two titles for their keen eye for risk management and strategic precision in delivering expertise. International Business Magazine recently adjudged the firm as ‘Best Management Consulting Startup UAE 2022’ and ‘Best New Boutique Consulting Firm UAE 2022’ for their excellent business consulting services as they possess passion and a drive to achieve high-impact business results.

Risk Advice for Year-End

What are some general tips for organisations to consider as we approach year-end? We asked Johnny Kollin to list the top-3 tips.

  1. Increased fraud risk: “The first thing that comes to mind is to be aware of the increased risk of fraud during the holiday season,” says Kollin. “Employees can be more relaxed, and a junior colleague working shifts on Christmas Day may have a higher threshold before they call senior management to alert them of any anomalies.”
  • Close out the current year and prepare for the next: Risk management is, or should be, a continuous process, says Kollin. That said, now may be an excellent time to take stock of the achievements and shortcomings of this year and prepare for the next. What went well from a risk management perspective? Were there any unexpected risk incidents, and why were they missed? What are the key themes management expects in its external and internal environment in 2023, and how could they affect the strategy? Does the company have the necessary resources and know-how to tackle those risks?
  • Talent: Companies that run bonus schemes will often have a cut-off date for payments in the first quarter of the year. Employees may be on the lookout for new opportunities but are waiting for their annual payouts. Accordingly, companies need to be prepared for the risk of critical employees leaving at a time when they are just about to begin executing their yearly objectives, says Kollin. Finding the right talent can take months, so contingency arrangements should be in place.


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