DAVOS, Switzerland—The World Economic Forum, an influential gathering of business and government leaders, has called for the creation of the role of a national risk manager to prioritize risks and invest in risk management and mitigation.

The call came from the Global Risk Network, a committee of the WEF that will discuss its ideas on tackling global risks at next week's meeting of international economic, social and political leaders in Davos, Switzerland.

The Global Risk Network unveiled the national risk manager concept and its latest "Global Risks" report at a press conference in London late last week.

Jacques Aigrain, chief executive officer of Zurich-based Swiss Reinsurance Co., and Michael Cherkasky, president and chief executive officer of New York-based Marsh & McLennan Cos. Inc., presented the key findings and proposals.

They said that, according to the WEF's analysis, the world is a riskier place in 2007 than it was in 2006, and that businesses and governments need to increase their efforts to identify and analyze risk, and to prioritize properly and mitigate those risks where feasible.

The Global Risk Network believes that the rapid pace of globalization is outstripping the institutional and political capability of governments--and to a lesser extent, businesses--to cope with the attendant risks.

The group says that companies and governments are still prone to reacting to individual risks when they have already happened rather than identifying the key risks and acting to prevent them or at least minimize their impact.

It says that risks presented by the heightened interdependency of the global economy need a much more forward-looking approach that current institutions and systems--particularly within national governments--simply cannot deliver.

The WEF group, therefore, concludes that risk experts must lobby governments to consider the creation of the role of country risk manager to help prioritize risks and investments in risk management and mitigation.

Interwoven risks

The group maintains that such individuals could also work together on a global basis to help develop more strategic international plans for dealing with huge and highly interconnected risks such as oil price shocks, climate change, terrorism and pandemics.

"Risks are often still viewed and dealt with in isolation. However, in today's world, global risks are tightly interwoven. To address our contemporary risk landscape, governments and enterprises need to take a holistic approach to overcome silo-thinking and acting," said Mr. Aigrain.

"We need to prioritize risks effectively, improve preparedness and strengthen public-private partnerships to mitigate risks and to finance economic losses. Finally, we propose to coordinate global risk mitigation efforts by creating the function of chief risk officers at governmental level who regularly meet on an international level," he continued.

"While risk mitigation is set to be a key theme at this year's meeting in Davos, there is continued evidence of a disconnect between risk and mitigation. The focus of government and corporations must not only be on reacting to events, but on utilizing effective enterprise risk management to set priorities, increase business focus, allocate resources and maximize efficiency," said Mr. Cherkasky.

"Catastrophic natural disasters in recent years have demonstrated that our ability to confront emerging risks depends more on the choices we make before a disruption than the actions we take during a crisis. Only a systematic planning approach will ensure that countries are prepared for the risk environment we currently face," he added.

The Global Risk Network says that the country risk officer would prioritize risks on a cross-sector basis and explore private sector techniques of risk assessment, management and transfer.

It says that this individual would take a portfolio view of risk as in the private sector and serve as a focus point in government for strategic thinking and forward action.

"The principal advantage of the CRO concept domestically would be to allow effective trade-offs between the priorities of different ministries, and to allow governments to escape silo-thinking. At the international level, the meeting of national CROs could provide a coordination body for global risk mitigation efforts," states the report.

The Global Risk Network report can be found at www.weforum.org/pdf/CSI/Global_Risks_2007.pdf