There have been many revolutionaries in history, but few quite like Hull factory worker Lillian Bilocca. In the winter of 1968, following the appalling loss of 58 trawlermen in three separate fishing incidents over a four-week period, she decided enough was enough. From the mid-19th century onwards an estimated 6,000 fishermen from Hull had died at sea – a level of peril that she was no longer willing to tolerate.
Lillian and three other Hull women – dubbed the ‘headscarf revolutionaries’ – led a movement to transform safety at sea. ‘The Fishermen’s Charter’, which the redoubtable campaigners drew up, demanded the full crewing of ships, the introduction of radio operators, and improved weather forecasting. Backed by over 10,000 signatures, Lillian secured a meeting with then Prime Minister Harold Wilson, who pledged his government’s support. In one of the most successful civil actions of the 20th century, Lillian helped dramatically lower Britain’s mortality rate at sea.
Maritime safety improvements have been mirrored over the last half century in many other industries – perhaps most notably in aviation, where there is now an average of just one fatality for every 287 million passengers carried by UK operators. This compares extremely favourably against many other risks, not least that age-old gauge of mortality risk, lightning, which poses a one in 19 million chance of killing us.
This remarkable improvement in safety, particularly in the developed world, is down in part to the adoption of systematic approaches to risk. In aviation, this has involved rigorously learning lessons from accidents, continuously improving safety management systems, ensuring confidential reporting channels and enhancing cockpit decision-making.
Corporate risk management has introduced similarly systematic approaches to financial and operational risk. In the wake of the Enron scandal and the 2008 financial crisis, the ‘three lines of defence’ model was developed.
Now widely adopted in the private sector, this simple structure separates the ownership of risk on the first line, in operating departments, from its oversight on the second – often under a Chief Risk Officer who provides a single point of accountability – and independent assurance that the process works on the third. An empowered Chief Risk Officer is able to work with the first line to identify and assess the risks they own, hold them accountable for mitigation, and report progress to the board so members can understand and respond to the level of risk in the business.
Enron’s demise may have been avoided had this basic system been in place. I know of one public company where the introduction of ‘three lines of defence’ resulted in the identification of 50% more risk than previously existed in its risk register and significantly enhanced its preparation to handle the materialisation of half of its top ten risks in the ensuing 12 months. Put simply, the model works.
More broadly, however, when it comes to risk, something deeply counterintuitive and largely unnoticed is going on: while the introduction of systematic risk management has dramatically reduced the odds of specific risks, like a plane crashing, the chances of extreme risks impacting society at large have gone in the other direction.
In this year’s Global Risks Report from the World Economic Forum, a remarkable 89% of risk experts and global leaders perceived the short-term outlook to be volatile, fractured, or increasingly catastrophic. Toby Ord, the risk expert and author of The Precipice, estimates that there is now roughly a one-in-six chance of existential catastrophe in the next 100 years from extreme risks such as natural or engineered pandemics, extreme climate change scenarios, nuclear conflict, and the creation of an unaligned general artificial intelligence. We are playing Russian Roulette with the future of humanity.
The Government has announced that it will soon publish the country’s first National Resilience Strategy. An inquiry undertaken by the House of Lords last year, which was set up to look into the country’s risk preparedness, shows how far short we fall. Drawing on 85 expert witnesses, the report examines the country’s approach to assessing and preparing for a wide range of risks, from chemical warfare to the climate crisis. ‘The pandemic has exposed the UK’s risk management system as deficient and too inflexible to provide the protection our nation needs’, it concludes.
The inquiry recommends a more effective system to overcome ‘an excess of siloed planning’ including an Office for Preparedness and Resilience and a new post of Government Chief Risk Officer. Essentially, it prescribes the ‘three lines of defence’ model for government.
The National Resilience Strategy is our best shot at getting this right. It is a chance for the Government to fundamentally rewire how it identifies and manages risk, at a time when we try to cope with tail risks of a global pandemic and war in Europe. The ‘three lines of defence’ model provides the discipline and accountability needed to tackle extreme risks. By adopting it, the UK can lead the way in how all countries can meet the scale of these challenges and work together to mitigate them.
On a bitterly cold day in January this year, as officials in Whitehall began work on the National Resilience Strategy, dozens of people gathered outside a house on Coltman Street in Hull. They were there to celebrate the unveiling of a blue plaque on the home of Lillian Bilocca, ‘leader of the headscarf revolutionaries’. We need Lillian’s vision not only to be commemorated in her home city, but to be reflected in Government policy too.
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