The Value of Risk Management: Not An Obstacle

Recently, Lloyds Banking Group announced they were restructuring their Risk department, citing that two-thirds of executives find risk management is an obstacle.

When I first read that, I gasped for just a second, because everyone in risk (and related fields) has heard some version of it: we’re an obstacle, we’re overdoing it, is that really necessary, the organization down the street isn’t doing it…

And honestly? It’s exhausting. Overcoming objections, creating buy-in, and repeatedly explaining why risk isn’t “the no department” is part of the job. Which is exactly why this topic keeps coming up, over and over again.

This is also where the value of risk management gets real: if the organization experiences risk as “friction,” we either (1) keep pushing the same message louder, or (2) change the way we show up.

What Lloyd’s Move Might Actually Mean

I’ve seen plenty of debate on LinkedIn about Lloyd’s approach, with some saying risk managers should be worried, others saying the bank is acting prematurely and it will backfire.

From what I’ve read, the bank plans to create 130 new roles that are more specialized and technology-focused.

That makes sense when you consider Lloyd’s plan launched in February 2022 to invest £4bn over five years to diversify away from interest-rate-sensitive income (like mortgages) and become a “digital leader.”

I don’t know exactly how Lloyd’s risk department is structured, so I can only make assumptions. But looking at their strategic direction, the move tracks.

The “Risk is an Obstacle” Problem Isn’t Going Away

What we do know for a fact is that risk management continues to be looked at as an obstacle, and that’s a global phenomenon. And in many organizations, that perception says more about the risk management culture than it does about the risk team itself.

Do I believe our profession is suddenly at risk? Nope.

Do I believe we have to continuously evaluate our approach and always focus on how we provide value? Absolutely.

Because what’s the alternative?

Audit can cover some of what we do, but their skillset and roles are vastly different. Their need for independence and their approach, which is always limited by scope, doesn’t set them up to be successful here.

And let’s be real: audit hears the same “y’all are an obstacle” response too. They’re fighting similar battles.

The Value of Risk Management is Enablement, Not Obstruction

I say this a lot and I’ll continue to say it: we as risk managers have to focus on being enablers.

That means we have to keep asking ourselves:

• How do we support the strategic goals of the business?

• How do we support decision making in the organization?

• And if our message isn’t resonating, are we willing to change our messaging?

That’s the practical value of risk management: helping leaders move faster with clearer tradeoffs, fewer blind spots, and fewer “surprise” consequences.

The Real Question: Will This Change the “Obstacle” Narrative?

What I believe Lloyd’s is doing is being forward-looking and focused on strategic goals. They realize playing in the digital landscape will require specific skills on their risk teams, and they are creating positions for that.

Will it change the organization’s perspective that risk is an obstacle?

That all depends… as us risk folks like to say…

And it depends on the same thing it always does: whether the organization can feel the value of risk management in outcomes with better decisions, fewer preventable headaches, and smarter progress rather than only experiencing it as a speed bump.

More info here!