Our Risk Insider client newsletter provides you with the latest information, news, articles and events in the technology, fraud, cyber security, data analytics and environmental sustainability space.

30 November 2023

ESG in business is changing what it means to be successful and that means your business needs to change too. But creating an ESG business strategy is no easy task, especially as it’s a complicated and evolving concept. What is clear is that having an ESG strategy is fast becoming an imperative for all stakeholders. The definition of a stakeholder has also expanded to cover prospective employees, existing workforces and clients, so organisations must meet the expectations of each group when it comes to doing the right thing and conducting business the right way. There is also several existing ESG compliance and reporting requirements that businesses need to be aware of along with complicated ESG regulation – but this is a fluid and complex area. ESG comes with complex challenges, but it also comes with a wealth of opportunities. Organisations that respond to the ESG changes early stand ready to benefit from the new forces shaping decision making.

Generative AI Revolution such as ChatGPT is here to stay so understanding more about the technology and growing our confidence in its power to impact the way we do business is critical. Gartner’s latest tech impact radar suggests that Generative AI will have what it calls “High Mass” impact in 3-6 years. In 2022, it estimated this to be 6-8 years. But in the meantime, some companies are already sitting on the right side of the curve, with use lying in these eight general application areas:

Data generation
Code generation
Text generation
Image generation
Video generation
Audio generation
Model generation
Avatar generation

The technology is certainly going through the hype cycle, especially while we are all grappling with what the technology is, how it works and establishing its limitations. The consensus is “Trust but Verify” as AI is doing things that experts cannot explain, like inventing case law and rulings that never existed when used by a law firm to build its case. As AI becomes more pervasive, it brings both benefits and challenges that must be effectively addressed. Therefore, it is essential for boards to establish robust frameworks of Governance, Risk, and Compliance (GRC) to ensure responsible and ethical AI practices.

Fraud volume and the cost per dollar of fraud loss, both of which are persistent and growing business risks, are rising. Many businesses are vulnerable to fraud, particularly those that have sales channels exposed to electronic payment portals and systems, account-driven customer bases, complex global supply chains, significant presence in emerging markets, and so on. Having a strong Fraud Prevention Framework for fraud risk management, can provide a catalyst for organisations to strengthen their fraud risk management program activities, particularly the application and enhanced use of data analytics to identify, validate, and monitor the risks of fraud as part of the fraud risk assessment.

Finally, effective risk management has never been so important. Risk processes have always been a vital part of any organisation’s strategy and performance. With the increasingly challenging nature of issues that organisations are facing, there is a growing need for a cohesive and comprehensive approach to risk at all levels. Boards have moved beyond simply overseeing the risk management policies and practices of their organisations. They now need to further consider how business practices are aligned with the organisation’s objectives, values and risk appetite.

Risk management is no longer a static or one-off activity, but a dynamic and ongoing process that requires constant monitoring, evaluation and adaptation. It needs to assess different views of risk and consider how risk operates with each other. Therefore, boards need to ask the right questions when considering risk issues. This is to not only challenge management and the risk function to provide clear and credible answers but also to consider what may be missing from the existing risk profile.

In this month’s Risk Insider, we provide insights on the issue of AI governance, fraud and corruption control for Australian Commonwealth corporate entities, how to lay the foundations for ESG and reap the benefits of trust in the digital and enhancing National Security.  In particular, our point of view identifies the primary drivers for these changes to the risk and control environment and lists pragmatic considerations for your consideration.                                 
     
Warmest regards,                                 
Jean-Marc

ARTICLES AND INSIGHTS

AI governance: Is governing us any different?

As artificial intelligence (AI) becomes more prominent in every aspect of our lives, organisations face the challenges of ethical, legal and social implications.
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How to lay the foundations for ESG and reap the benefits

If you are a small or medium-sized business, you might be familiar with ‘ESG’ (environmental, social and governance) and think: How can I add that to my already busy agenda?

Driving better outcomes in childcare with unified data

Running a childcare centre or out-of-school care service? Make sure you are harnessing the full potential of your data.
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Trust in the digital age: Lessons from Bank of Baroda

Trust is a precious asset for any organisation in the digital age. Maintaining customer confidence has been a key challenge in the finance sector.

As health spending skyrockets, hospitals must look for new paths to financial sustainability

As global health spending grows faster than the economy, hospitals in Australia, both public and private, must seek new solutions to remain financially viable.
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Enhancing National Security: The Crucial Role of Program and Project Management in Defence

The world is changing fast, with new threats, technologies and geopolitical shifts. Our security and defence systems need to keep up with these changes.
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Cyber still a key issue for SMEs

With increased cyber breaches, it is important for small businesses to take cyber security seriously and not put it in the “too-hard basket”.
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EVENTS AND SPONSORSHIPS

Fraud and Corruption Control | Webinar

RSM hosted a webinar in line with International Fraud Awareness Week, a global initiative dedicated to combatting fraud, raising awareness, and fostering a culture of integrity and transparency.

Find out more >>

RSM Australia - Exclusive ACFE Authorised Trainer for the CFE Exam Review Course in Australia | 2024

Prepare yourself for the CFE exam in 2024 with the skills and knowledge you need to succeed. 2024 Registrations are now open!

Register here >>

sopac 2024

SOPAC 20234
3-4 MARCH | Sydney

Connect with IIA-Australia and other internal auditors face-to-face at the International Convention Centre Sydney or online at next year's SOPAC conference.

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GOVERNMENT CASE STUDIES

RSM Australia recently published three case studies that showcase our expertise and experience in assisting government organisations with fraud and corruption issues. These case studies demonstrate how we deliver peace of mind, value and insights to our clients in the public sector.

Forensic investigation for a government organisation in the education sector

Fraud and corruption control for NSW State Government

Fraud and corruption control for Australian Commonwealth corporate entity

CYBER SECURITY CASE STUDY

Notre Dame University

A national Catholic university with campuses in Western Australia and New South Wales. As a leading provider of higher education, the university needed a strong and proactive cyber security strategy to deal with various cyber threats and challenges. That's why Notre Dame partnered with RSM, a leading provider of risk services, cyber security and privacy services, IT consulting and operational support.

Watch here >>

Want to keep reading? View the past editions of Risk Insider here >>