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Turning Risk into Opportunity
Insight from the FICCI – GRMI Model Risk Code
Mangaldas & Co Advocates & Solicitors, and Mr.
Subhashis Nath, Founder & CEO, Global Risk
Management Institute, amongst its members.
The objective of the Risk Task Force was to
create a Model Risk Code for the Indian industry
and empower the corporates to embrace risk
management practices and reap its benefits.
Subhashis Nath Jayant Palan The Risk Taskforce went through 15 months of
Dean & CEO- Jayant Palan Co founder intense deliberations and fortnightly brainstorming
Global Risk Management Global Risk Management sessions to discuss their real-life experiences,
Institute Institute leading practices and recommendations, which
subhashis@grm.institute jayant@grm.institute
culminated into the draft Model Risk Code. The
draft document went through a stress testing phase
with senior leaders from 22 companies, including
Over the last decade, India has witnessed turmoil Maruti Suzuki India, Hindalco Industries, Godrej
across large corporates, MSMEs and startups; & Boyce Mfg Co. Ltd, Dabur, PepsiCo., ITC, Tata
from a potential accounting debacle at an Ed-Tech Steel, Titan, L&T, Mahindra & Mahindra before
start-up, to a series of senior management exits being finally released in November 2022 at FICCI
amidst market headwinds at a beauty ecommerce, Federation House.
to a near collapse of a private sector banking major
due to corporate governance issues. And as India The MRC is designed as a practical playbook
continues the envious ride to becoming the 3rd with best practices and guidelines around risk
largest economy over the next 4 years and earn management and is meant to be applicable to
the tag of ‘the world’s growth engine’, it is bound entities including, but not limited to, listed
to encounter more such roadblocks. But there is companies and public unlisted companies,
significant merit in equipping companies with private companies, start-ups, societies, and
a framework to foresee potential internal and trusts. The target audience of the MRC includes
external risks or disruptions, assess, respond, and Board members, Risk Management Committee
monitor such potential risks or disruptions, as it members, CEO, CXOs, Business Unit/Operating
will be a key to marginalize the impact of such Heads, CROs, and business managers.
roadblocks and accelerate India’s journey.
The MRC focuses on bringing out best practices
Realizing a pressing industry need, in April 2021, around embedment of Risk Culture, KRA
FICCI and Global Risk Management Institute definitions around Risk Management, Risk
collaborated to set up an 18-member Risk Task identification, Risk scale, Risk measurement,
Force comprising Board members, Big 4 Chair/ Risk treatment, Risk governance structure, Risk
CEOS, and global risk and academia leaders. The reporting and monitoring, Risk resources and
Risk Task Force was chaired by Mr. M. Damodaran, engagement with internal / external stakeholders.
Former Chairman, Securities and Exchange Board It calls out how Boards as well as individual
of India and included Mr. Sunil Mehta, Chairman, Directors have their tasks cut out in driving a
IndusInd Bank, Former Chairman, PNB & Yes risk culture, as also to create a climate for risk
Bank, Mr. Mukesh Butani, Founding & Managing appreciation, awareness, and the implementation
Partner, BMR Legal, Mr. Nawshir Mirza, Former of sound practices.
Senior Partner at E&Y LLP, India, Mr. Shardul
Shroff, Executive Chairman, Shardul Amarchand The key messages that the members of the Risk
59 INTERNAL AUDIT TODAY
