Opinion: Caution -- Big Risks Ahead

(Jan. 4) -- If the past decade is notable for anything, it's the number of times we said to ourselves, "Things will never be the same." Isn't that what we said after 9/11? After Hurricane Katrina? After Lehman Brothers collapsed? After our government bailed out Citibank, AIG and General Motors? These are things most of us couldn't have imagined at the start of the millennium. Indeed, few thought they could ever happen. But they did.

As we start a new decade, the question is, what new threats and uncertainties will we confront in what has turned out to be a darker, more dangerous time rife with new and complex risks? And, more importantly, what have we learned from the past decade and what are we doing differently as a result of these lessons?

Not enough, in my opinion. That's unfortunate.

Flight 253 reminded us once again that terrorism remains a very real risk. But there are others, ranging from cyberattacks to tainted products and life-altering changes that stem from greenhouse-gas emissions and other human impacts on our environment.

History teaches us time and again that when people, companies or countries truly see, understand and confront the major risks of their time, they make things better. They create new opportunities. As we cross the threshold of a new decade, I believe we will, too, but let's not kid ourselves: We have serious work ahead of us and no time to lose.

These days, I'm carrying around a list of my "Top 10 Risks" for doing business today. Their order isn't as important as the unique concerns each raises for how we live our lives.

10. Reputation
9. Supply chain integrity
8. Piracy
7. Cybersecurity
6. Globalization
5. Cost and availability of credit
4. Regulation and compliance
3. Pandemics
2. Terrorism
1. Climate change

People and businesses may order their lists differently; some risks might come off the list, others may go on.

The point is this: The risks of the 21st century are big, real and complex, and they must be faced. It's critical for us all to recognize these risks, make sure we truly understand how those issues affect our respective lives, our country and businesses, and have a plan to address them.

In my view, leaders need to step up and focus on three essentials: identify the risks through a comprehensive assessment; attack those risks head-on; and be transparent about the risks and plans to limit or eliminate them.

It's the obligation of all leaders to act on these priorities and prepare and protect their stakeholders for the worst – however improbable the worst may seem.

This may mean changes to operations, rigorous contingency planning, holding vendors accountable for their own risk management, tailoring insurance coverage to new threats and talking transparently about it all.

No part of this responsibility is more important than transparency. Leaders need to be truly open with all stakeholders – customers, employees, investors, the public – about the risks they face and the safeguards they put in place.

If we succeed, we will create new opportunities in the coming decade and, over time, preserve our world and our way of life for future generations.
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Joseph J. Plumeri is the chairman and CEO of Willis Group Holdings, the global insurance broker.