Being frisked at an airport security checkpoint can be embarrassing, especially if you happen to be the former Secretary of Homeland Security. Tom Ridge knows. He's been there.
Ridge has been pulled aside by TSA officers at these checkpoints more than two dozen times since tightened security measures were put in place after Sept. 11. But he also understands the delicate balance between risk taking and security.
"Risk is a two-edged sword," he said. "One side is the perils you want to avoid, the other the opportunities that you might want to seize."
Ridge, the first-ever director of the Department of Homeland Security headlined the 6th Annual Conference on Corporate Governance, which brought about 125 members of the local business community to the School of Management (SOM) for the Oct 1 event.
He spoke to the importance for companies to assess and manage risks posed by energy availability, natural disasters, terrorism, and an increasingly volatile economy.
"Any organization that does not have embedded in their culture the notion of risk - thoughtful, calculated risk - is probably a pretty static organization and in time is probably going to atrophy anyhow," Ridge said.
This year's event, which was sponsored by the UTD Institute for Excellence in Corporate Governance, was entitled "Risk Management for Globally Interconnected Enterprise," which was a fitting title given current economic circumstances, said Reatha Clark, director of ExxonMobil.
"Had you told us when you set out to plan this conference that we'd be in these times, we wouldn't have believed you," said Clark, the day's first speaker. "We want your crystal ball."
Students who attended were allowed to waive the $495 registration fee.
"Risk is what I deal with on a daily basis," said Daniel Garza, a graduate student in accounting who works as a financial supervisor for State Farm. "It'd be a good experience to meet these nice people here and learn from them as much as I can."
Other speakers included James Oberwetter, former U.S. ambassador to Saudi Arabia; Angelina Kwan, chief operating officer for Southeast Asia, Cantor Fitzgerald; Jose Monforte, chief executive officer, Brazilian Corporate Governance Institute; and Paul Dickerson, chief operating officer, Department of Energy.
The idea said Constantine Konstans, IECG director and conference organizer, was to show how risk is determined by geographic regions and commodities especially important to the global economy.
The day ended with a panel discussion featuring Trent Gazzaway, national managing partner of corporate governance, Grant Thornton; Dennis McGuffie, vice president of Audit Services for Tenet Healthcare; Stephen Wagner, national managing partner of corporate governance for Deloitte and Touche; and Mary O'Connor, partner with Akin, Gump, Strauss, Hauer and Feld.
Jeffrey Armitage, senior risk manager for Fannie Mae, the mortgage giant at the epicenter of the current housing crisis, was also on the panel.
"That was my attempt at theatricality," Konstans said. "But he's very good. We didn't want to bring a sacrificial lamb into the fold."
Armitage refused to comment on risk assessment in the mortgage industry, but said that the conference offered knowledge directly applicable in the corporate boardroom.
"We're not managing our institutions, both public and private, properly," he said. "We don't want so much corporate governance that it acts as a straightjacket, but at the same time we don't want to have such flaccid rules that it nullifies our ability to control greed."
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