Despite an oil rig collapse near Rio in 2001, a 2004 commuter train crash, a seven-year drought that crippled the country’s hydroelectric power system, and many other disasters, many Brazilian companies aren’t doing enough to cover their risks, according to the head of the Brazilian Risk Management Association.
“A lot of people don’t even understand what risk management is within companies,” said Marcelo D’Alessandro, director of ABGR, the Brazilian risk managers’ group. He went on to point out that many in the commercial sector remain unwilling to implement effective programs to mitigate operational risks – even though a law passed in 1966 mandated that companies buy insurance to cover most risk and liabilities.
“There’s a lack of preparation,” he said “We are always running after problems.”
But others say corporations in Brazil are starting to come around. Andrea Almeida, risk management director at Vale S.A., said, “We have managed to set risk objectives for the next five years … our motto is that ‘the best spending of money is for risk reduction’.”
That’s a motto every company, everywhere, should adopt!