CA Ramakrishna Laksman: Advocating The Importance Of Risk Management With Passion & Perseverance
CA Ramakrishna Laksman
Chief Risk Officer
Brief us about your educational and professional background.
I am a Chartered Accountant (C.A.) specialized in finance,systems, insurance, and risk management. I have a passion for engineering, and machines take me by surprise with the great precision & frequency. During my early days as C.A., I have done system audits of major industries like Textile, Viscose, Bimetal, Bearings, Beverages, and others. Having spent hours in the factory with workers, technicians, and supervisors, I now am well acquainted with the manufacturing processes.
This unique combination of financial acumen with engineering interest has helped me to become more inquisitive towards risk management. My initial job in insurance required me to visit with our technical team for risk inspection, When I joined Reliance Infrastructure, I had the opportunity to risk study the powerplants (including ULTRA mega power), generation, distribution, and transmission of power, and more. Later, in my Global role as the risk manager, I had the privilege of over 39 downstream petrochemical plants spread across 14 countries. I am familiar with insurance underwriting, claims settlement, and reinsurance procedures. I bear the exclusivity of working as an insurance procurer (on client-side), insurance provider (insurance company & broker), and insurance carrier (reinsurer).
In your journey so far, which are the milestones that bestowed you with utmost satisfaction - both as an individual and a CRO?
I have done the risk management for over 10 power plants, risk study & reporting for three Ultra mega
power plants (of which one took off), 12 toll road projects, over 19 EPC projects, four transmission line projects, two metro rail projects, and Bandra WorliSea Linkproject. I have also done risk management for 30 downstream petrochemical plants, Western India dedicated corridor, Wind and solar power, and aviation including private jets. Today, I am proud to say that I am one of those venerable personalities who have accomplished a huge number of demanding projects. As a CRO in Thailand, I prepared the enterprise risk management reporting in a short time, much to the surprise of the board. I have also published few articles like- ‘Going Global, a global insurance program’, ‘Nestle Maggi, call to product recall insurance in 'Insurance Magazine’, and ‘Introduction to Enterprise Risk Management, in the book published by RMAI’.
What are the challenges you have encountered in your professional journey so far?
Each project was a challenge by itself in my professional journey. Risk management often is discussed at the board level as a part of compliance but has not percolated down the line. In an existing plant, I have seen instances where the plant director ignored the operational risks and was reluctant to carry our risk improvement measures due to cost-saving. I have seen some of the obsolete machines, whose OEMs wound up their business long ago, still run with local assistance. In the new projects, there is always a business risk of over-optimistic and unrealistic revenue estimation, involved when one projects a rosy picture to management. I still remember an instance, where the actual daily collection was less than 20 percent of what was projected, so the project got derailed.
What are the role & responsibilities that you have been undertaking at Mantraa Advisory?
Mantraa Advisory Services, with financial specialists, provides the entire gamut of financial services on a platter be it ramping up capacity, setting up a new business, arranging loans, improving the present working towards profit maximization, mergers & acquisitions, and more. My role is to provide them the risk management support like risk audit, detailed risk study, setting up the enterprise risk management in an existing plant, and providing risk reports for the new ones. I have done ERM study and helped in setting up ERM committees for a mid-sized paper unit. Recently, we have done a detailed risk study, for a foreign company in the CSP Solar power plant for setting up their plant in India.
Identifying the risk, analyzing it beforehand by evaluating & communicating to the risk owners, the risks can be mitigated
What are the challenges you have encountered in your professional journey so far?
Each project was a challenge by itself in my professional journey. Risk management often is discussed at the board level as a part of compliance but has not percolated down the line. In an existing plant, I have seen instances where the plant director ignored the operational risks and was reluctant to carry our risk improvement measures due to cost-saving. I have seen some of the obsolete machines, whose OEMs wound up their business long ago, still run with local assistance. In the new projects, there is always a business risk of over-optimistic and unrealistic revenue estimation, involved when one projects a rosy picture to management. I still remember an instance, where the actual daily collection was less than 20 percent of what was projected, so the project got derailed.
What are the role & responsibilities that you have been undertaking at Mantraa Advisory?
Mantraa Advisory Services, with financial specialists, provides the entire gamut of financial services on a platter be it ramping up capacity, setting up a new business, arranging loans, improving the present working towards profit maximization, mergers & acquisitions, and more. My role is to provide them the risk management support like risk audit, detailed risk study, setting up the enterprise risk management in an existing plant, and providing risk reports for the new ones. I have done ERM study and helped in setting up ERM committees for a mid-sized paper unit. Recently, we have done a detailed risk study, for a foreign company in the CSP Solar power plant for setting up their plant in India.
As the CRO of Mantraa Advisory, what are the key drivers that you deploy to ensure that the company’s risks factors are evaded appropriately to meet its short/ long term needs?
To manage the risk & uncertainty, the risks are divided into different groups like Business risk, Financial risk (including exchange risks), Operational risk, Credit risk, Environmental risk, Legal & Compliance risk, Human safety risk, and Cyber risk. Also, it’s the risk management that tells threats in operating environment and allows to pre-emptively prepare for furthur. In the absence of risk management, businesses would face heavy losses because they would be blindsided by risks. In one discom, risk study helped to incorporate a three-month escrow clause to avoid loss due to default. One project was stalled when we realized not to depend on published data, and it needs verification.
Identifying the risk, analyzing it beforehand by evaluating & communicating to the risk owners, the risks can be mitigated. Hence, to study the occurrence of an event, here we have many risk simulation tools like Monte Carlo simulation, IBM simulation & more, which are used normally when the business is caught with high severity & high-frequency risks.
How do you update yourself with the latest technologies and trends in the domain of risk management?
I am a fellow member of Risk Management Association, Insurance Institute of India, Insurance & Risk Management Association of India, so I regularly stay updated reading through their magazines and posts in the group. Also, for further knowledge on new technologies and modern trends, I like to surf through the internet. To stay in tune with the industry today, I still have my contacts with insurers, my peers & other risk managers. I keep updating myself with latest tools in risk management. Now-a-days I am concentrating more on understanding the cyber risk, which is yet to hit India, though virulent abroad.
What is your final take on the role of risk management in an organisation?
Risk management is very important to any business. Unfortunately, in India, it is carried out more as compliance than as an integral part of the business. There is a big communication gap between the risk management perceived at the management level and the floor level. Businessmen are too comfortable thinking that their business is fully secured through insurance. Any major catastrophes will prove that they are wrong as there are many losses like loss of man/machine-hours, disruption of services, human loss, relocation, loss of reputation, halting of production, and so on. A typical example is the recent fire accident in SERUM Institute. All these losses how so ever insured ultimately will fall on business. So good enterprise risk management policy is the sine qua non for any business to run smoothly.
To manage the risk & uncertainty, the risks are divided into different groups like Business risk, Financial risk (including exchange risks), Operational risk, Credit risk, Environmental risk, Legal & Compliance risk, Human safety risk, and Cyber risk. Also, it’s the risk management that tells threats in operating environment and allows to pre-emptively prepare for furthur. In the absence of risk management, businesses would face heavy losses because they would be blindsided by risks. In one discom, risk study helped to incorporate a three-month escrow clause to avoid loss due to default. One project was stalled when we realized not to depend on published data, and it needs verification.
Identifying the risk, analyzing it beforehand by evaluating & communicating to the risk owners, the risks can be mitigated. Hence, to study the occurrence of an event, here we have many risk simulation tools like Monte Carlo simulation, IBM simulation & more, which are used normally when the business is caught with high severity & high-frequency risks.
How do you update yourself with the latest technologies and trends in the domain of risk management?
I am a fellow member of Risk Management Association, Insurance Institute of India, Insurance & Risk Management Association of India, so I regularly stay updated reading through their magazines and posts in the group. Also, for further knowledge on new technologies and modern trends, I like to surf through the internet. To stay in tune with the industry today, I still have my contacts with insurers, my peers & other risk managers. I keep updating myself with latest tools in risk management. Now-a-days I am concentrating more on understanding the cyber risk, which is yet to hit India, though virulent abroad.
What is your final take on the role of risk management in an organisation?
Risk management is very important to any business. Unfortunately, in India, it is carried out more as compliance than as an integral part of the business. There is a big communication gap between the risk management perceived at the management level and the floor level. Businessmen are too comfortable thinking that their business is fully secured through insurance. Any major catastrophes will prove that they are wrong as there are many losses like loss of man/machine-hours, disruption of services, human loss, relocation, loss of reputation, halting of production, and so on. A typical example is the recent fire accident in SERUM Institute. All these losses how so ever insured ultimately will fall on business. So good enterprise risk management policy is the sine qua non for any business to run smoothly.