Pegalis: 'leaving the Risk Management department completely out of the loop'
', most risk managers still do not fully understand the implications of Y2K. As well, most companies have delegated Y2K exclusively to the CIO, leaving the Risk Management department completely out of the loop'
'It is not only dangerous to rely on vendor certifications, it can result in liability'
' Failure to comply with FRB notices can bring swift action, such as the cease and desist order'
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'Greg-
You should talk to Cath Browning, your US counterpart at IQPC. She is looking to put together a seminar on "Managing and Financing Y2K Risk."
To answer your question, most risk managers still do not fully understand the implications of Y2K. As well, most companies have delegated Y2K exclusively to the CIO, leaving the Risk Management department completely out of the loop. The results are foreseeable. Major components are being missed and CIOs are being asked to prioritize efforts without the benefit of understanding how each internal or embedded system or external business dependency generates revenue, services clients, supports personnel, and the
liability that failure of each can cause. As well documentation is
generally poor, making substantiation of efforts unnecessarily difficult.
It is not only dangerous to rely on vendor certifications, it can result in
liability (breach of the duty of diligence) or administrative actions
against the organization. Here in the US, the Federal Reserve Board's most recent notice on Y2K
bog.frb.fed.us clearly warns federally insured banks not to rely on compliance statements stating "[they are] not sufficient to ensure that a product or service would operate properly in the unique environment of many user institutions." Failure to comply with FRB notices can bring swift action, such as the cease and desist order handed down to three Georgia banks for slow (non-existent) Y2K progress.
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Andrew M. Pegalis, Esq.
President
Next Millennium Consulting, Inc.
--Providing Comprehensive Y2K Risk Management Services--
pegalis@consult2000.com
consult2000.com '
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'Date: Thu, 19 Feb 1998 16:44:03 -0500
From: Andrew Pegalis <pegalis@consult2000.com>
Subject: re: Risk Managers 'Opinion Poll'
To: year2000-discuss@year2000.com |
