1 00:00:03,270 --> 00:00:06,569 Sean Aylmer: Welcome to the Fear and Greed daily Interview. I'm Sean Aylmer. 2 00:00:07,020 --> 00:00:09,340 Sean Aylmer: Whether, it's Crown or the Star, I don't reckon a 3 00:00:09,340 --> 00:00:11,280 Sean Aylmer: day's gone by in the last few weeks when we 4 00:00:11,280 --> 00:00:15,550 Sean Aylmer: haven't mentioned the gaming sector. We've had some extraordinary revelations 5 00:00:15,550 --> 00:00:18,410 Sean Aylmer: and allegations come out of the inquiry into the Star 6 00:00:18,440 --> 00:00:21,690 Sean Aylmer: in New South Wales. In one case the casino allegedly 7 00:00:21,690 --> 00:00:25,989 Sean Aylmer: processed almost a $1,000, 000 from one gambler as payment for 8 00:00:25,989 --> 00:00:29,660 Sean Aylmer: 27 nights of accommodation that he didn't actually use. Before 9 00:00:29,660 --> 00:00:31,640 Sean Aylmer: providing the money back to him for use on the casino floor. That 10 00:00:33,540 --> 00:00:36,860 Sean Aylmer: man spent almost $ 100 million dollars over 15 years using 11 00:00:36,860 --> 00:00:40,770 Sean Aylmer: a banned China UnionPay card. On another occasion, the casino 12 00:00:40,770 --> 00:00:43,540 Sean Aylmer: was allegedly dealing with a member of a Chinese triad 13 00:00:43,540 --> 00:00:46,390 Sean Aylmer: gang and did nothing about it for three months. It 14 00:00:46,390 --> 00:00:51,080 Sean Aylmer: also emerged that CEO, Matt Bekier had slammed a 2018 KPMG 15 00:00:51,080 --> 00:00:54,040 Sean Aylmer: report that had been critical of the Star's anti- money 16 00:00:54,290 --> 00:00:58,360 Sean Aylmer: laundering and counter- terrorism financing systems. Mr. Bekier, of course, 17 00:00:58,360 --> 00:01:01,320 Sean Aylmer: resigned last week. Meanwhile, Crown Resorts is still on track 18 00:01:01,320 --> 00:01:04,290 Sean Aylmer: to be sold to US investment giant Blackstone, having kept 19 00:01:04,290 --> 00:01:07,760 Sean Aylmer: its license to operate a casino in Western Australia. Crown's 20 00:01:07,760 --> 00:01:10,170 Sean Aylmer: had a shocking couple of years, facing inquiries in New 21 00:01:10,170 --> 00:01:14,709 Sean Aylmer: South Wales, Victoria, NWA, which uncovered widespread money laundering and 22 00:01:14,709 --> 00:01:17,960 Sean Aylmer: dealing with organized crime. So, much in all that. Peter 23 00:01:18,230 --> 00:01:21,370 Sean Aylmer: Deans is a former chief risk officer and founder of 24 00:01:22,630 --> 00:01:25,500 Sean Aylmer: Notwithoutrisk Consulting. He was also the independent expert advisor to 25 00:01:25,500 --> 00:01:31,130 Sean Aylmer: the Victorian and Western Australian Royal Commissions in the Crown Casino. Peter, welcome 26 00:01:31,330 --> 00:01:32,340 Sean Aylmer: back to Fear and Greed. 27 00:01:33,120 --> 00:01:34,490 Peter Deans: Hi, Sean. Good to be back again. 28 00:01:35,000 --> 00:01:39,370 Sean Aylmer: What is it about the gaming sector that seems to make these issues 29 00:01:39,450 --> 00:01:40,440 Sean Aylmer: so widespread? 30 00:01:40,830 --> 00:01:44,179 Peter Deans: It's interesting, isn't it? I worked with a security guy 31 00:01:44,180 --> 00:01:47,530 Peter Deans: many years ago and he often said to me, " you 32 00:01:47,530 --> 00:01:49,750 Peter Deans: know why people rob banks?" He said, " that's where the 33 00:01:49,750 --> 00:01:52,950 Peter Deans: money is". And I think the same goes for casinos. 34 00:01:52,950 --> 00:01:56,529 Peter Deans: I think the volumes of money that they turn over, 35 00:01:56,530 --> 00:02:00,690 Peter Deans: the nature of the business inherently attracts a lot of 36 00:02:00,690 --> 00:02:05,200 Peter Deans: money looking for a place to be laundered or find 37 00:02:05,200 --> 00:02:05,680 Peter Deans: a home. 38 00:02:06,180 --> 00:02:09,470 Sean Aylmer: Is it possible for a gaming company to be run 39 00:02:09,470 --> 00:02:13,900 Sean Aylmer: profitably with a good return to shareholders, with good governance, 40 00:02:14,320 --> 00:02:22,701 Sean Aylmer: with no ill doings in Australia? Anywhere in the world for that matter? 41 00:02:22,701 --> 00:02:25,290 Peter Deans: Yes. Firstly say, I'm not a gaming industry expert and probably more on the risk management 42 00:02:25,300 --> 00:02:28,350 Peter Deans: side of things. But yes. I'd like to believe that 43 00:02:28,669 --> 00:02:32,570 Peter Deans: properly managed, properly regulated with the cheques and balances in 44 00:02:32,570 --> 00:02:38,690 Peter Deans: place. Even large, publicly listed gaming corporations can effectively be 45 00:02:38,690 --> 00:02:42,540 Peter Deans: run cleanly. But, it takes a lot of effort and takes 46 00:02:42,540 --> 00:02:46,300 Peter Deans: a lot of alignment of the things like, roles and responsibilities, 47 00:02:46,530 --> 00:02:51,300 Peter Deans: performance incentives, you have the right culture in place and 48 00:02:51,300 --> 00:02:55,359 Peter Deans: ultimately you need everything to work well from board level down. 49 00:02:56,139 --> 00:03:00,410 Sean Aylmer: Yes. I want to get into the Star in a moment, but what you said upfront, it's where 50 00:03:00,410 --> 00:03:01,940 Sean Aylmer: the money is. I suppose, if we think in the 51 00:03:01,940 --> 00:03:05,790 Sean Aylmer: last three or four years, the Banking Royal Commission, there 52 00:03:05,790 --> 00:03:10,609 Sean Aylmer: was criminal activity, wasn't of senior bankers, it was individuals 53 00:03:10,610 --> 00:03:16,399 Sean Aylmer: within organizations undertaking allegedly criminal activity. So, it isn't only 54 00:03:16,400 --> 00:03:20,600 Sean Aylmer: the gaming companies. The banks themselves have fallen foul of anti- 55 00:03:20,600 --> 00:03:24,460 Sean Aylmer: money laundering, particularly in the case of Westpac. So, it 56 00:03:24,460 --> 00:03:27,470 Sean Aylmer: may be, I'm just thinking aloud here, Peter, it's not 57 00:03:27,580 --> 00:03:30,100 Sean Aylmer: really unique to gaming? 58 00:03:30,100 --> 00:03:33,880 Peter Deans: No. It's a broader question around a ready society and 59 00:03:33,880 --> 00:03:38,720 Peter Deans: how the business world operates. You've had infiltration of criminal 60 00:03:38,720 --> 00:03:42,660 Peter Deans: gangs in large parts of the business activities, not just 61 00:03:42,700 --> 00:03:46,840 Peter Deans: in Australia and overseas. Whether, it's the auto industry, whether 62 00:03:46,840 --> 00:03:51,680 Peter Deans: it's all parts of financial services. Payday lending also had 63 00:03:52,040 --> 00:03:57,870 Peter Deans: many, many challenges for years, financial services, gaming, hospitality, more 64 00:03:57,870 --> 00:04:01,670 Peter Deans: generally. I think unfortunately the capitalist society we work in 65 00:04:02,310 --> 00:04:06,170 Peter Deans: and the criminal elements, they do follow the money. They find 66 00:04:06,460 --> 00:04:08,470 Peter Deans: the gap to go through. And, I think that's a 67 00:04:08,470 --> 00:04:10,910 Peter Deans: little bit where the casino industry found itself in the 68 00:04:10,910 --> 00:04:14,970 Peter Deans: last decade. There were clearly some gaps across many of 69 00:04:15,280 --> 00:04:19,000 Peter Deans: the main players and the criminal elements, they found the gap. 70 00:04:19,860 --> 00:04:21,520 Sean Aylmer: Stay with me, Peter, we'll be back in a minute. 71 00:04:21,930 --> 00:04:31,480 Sean Aylmer: My guest this morning is Peter Deans, a former chief risk 72 00:04:31,480 --> 00:04:35,930 Sean Aylmer: officer and founder of Notwithoutrisk Consulting and independent expert advisor 73 00:04:35,930 --> 00:04:39,010 Sean Aylmer: to the Victorian and WA Royal Commission's into Crown Casino. 74 00:04:39,960 --> 00:04:42,430 Sean Aylmer: Okay. So, is there anything out of the inquiry into 75 00:04:42,430 --> 00:04:45,770 Sean Aylmer: the Star, thus far, that's shocked you? 76 00:04:46,460 --> 00:04:49,630 Peter Deans: Yes. I'm not involved in Star in any way. And, 77 00:04:49,630 --> 00:04:52,119 Peter Deans: as you touched on my role last year was with 78 00:04:52,120 --> 00:04:55,030 Peter Deans: Crown. But I think from just listening to the hearings 79 00:04:55,339 --> 00:04:58,330 Peter Deans: and also some of the commentary that's come out, you've 80 00:04:58,330 --> 00:05:03,279 Peter Deans: got similar issues would appear to be emerging where the 81 00:05:03,279 --> 00:05:08,450 Peter Deans: risk governance and oversight, the understanding of the risks, was 82 00:05:08,450 --> 00:05:12,779 Peter Deans: probably not all through the organization. I think there was 83 00:05:12,779 --> 00:05:15,920 Peter Deans: clearly some people within Star and even the external advisors. 84 00:05:16,450 --> 00:05:20,050 Peter Deans: You mentioned the KPMG report that was tabled. They clearly 85 00:05:20,050 --> 00:05:23,299 Peter Deans: touched on issues that looked quite similar to what came 86 00:05:23,300 --> 00:05:26,930 Peter Deans: out of the Crown Royal Commissions. Yet they either weren't 87 00:05:26,980 --> 00:05:33,150 Peter Deans: properly socialized or perhaps the severity of magnitude issues wasn't 88 00:05:33,210 --> 00:05:37,229 Peter Deans: recognized, or perhaps there was a desire to either turn 89 00:05:37,230 --> 00:05:40,710 Peter Deans: a blind eye or perhaps to try and sort of 90 00:05:40,710 --> 00:05:44,820 Peter Deans: rationalize that things were being done to mitigate and address 91 00:05:44,820 --> 00:05:48,560 Peter Deans: the issues. And I guess the hearings to continue and 92 00:05:48,900 --> 00:05:51,560 Peter Deans: the final report come out, will answer the question of what 93 00:05:51,650 --> 00:05:55,010 Peter Deans: exactly happens. But, I think there's a combination of reasons 94 00:05:55,010 --> 00:05:58,219 Peter Deans: why things have happened from what's been talked about so far. 95 00:05:58,520 --> 00:06:01,440 Sean Aylmer: It seems that in the case of the Crown, they lost a CEO and a 96 00:06:01,440 --> 00:06:04,170 Sean Aylmer: chair. We now have the Star having lost a CEO 97 00:06:04,170 --> 00:06:08,940 Sean Aylmer: at this point. Certainly the responsibility does start at the 98 00:06:08,940 --> 00:06:10,150 Sean Aylmer: top, it seems? 99 00:06:11,270 --> 00:06:14,670 Peter Deans: I think the way corporate governance in Australia works, there's 100 00:06:14,670 --> 00:06:18,010 Peter Deans: quite clearly the responsibility that sits with the board and 101 00:06:18,070 --> 00:06:21,810 Peter Deans: ultimately the chair is the peak role in corporate governance 102 00:06:21,810 --> 00:06:26,140 Peter Deans: in Australia. And the CEO or CEOs are remunerated handsomely 103 00:06:26,410 --> 00:06:28,299 Peter Deans: to make it all work and bring it all together. 104 00:06:28,300 --> 00:06:32,510 Peter Deans: So, clearly the buck stops with both. It's interesting, I 105 00:06:32,510 --> 00:06:36,789 Peter Deans: said, this is this sort of alignment of remuneration, the 106 00:06:36,790 --> 00:06:39,710 Peter Deans: risk and reward being, right. And in the case of the 107 00:06:39,710 --> 00:06:43,770 Peter Deans: CEOs that resign or fall on their sword, the question 108 00:06:43,770 --> 00:06:46,700 Peter Deans: is, well, is it their responsibility to get the risk 109 00:06:46,880 --> 00:06:49,710 Peter Deans: and reward, right? Or what is the role of the board, 110 00:06:49,790 --> 00:06:52,640 Peter Deans: or is it a joint collective responsibility? And I think 111 00:06:52,640 --> 00:06:55,779 Peter Deans: the way it sort of panned out with Crown again, 112 00:06:55,779 --> 00:06:59,520 Peter Deans: I think the expectation of stakeholders be it regulators, investors, 113 00:07:00,000 --> 00:07:03,909 Peter Deans: is that there is individual responsibility for the CEO and 114 00:07:03,910 --> 00:07:06,529 Peter Deans: chair, but there's also a collective responsibility for the board and 115 00:07:06,600 --> 00:07:07,700 Peter Deans: the management teams. 116 00:07:08,250 --> 00:07:10,210 Sean Aylmer: Why would you be on a board of a casino 117 00:07:10,210 --> 00:07:12,630 Sean Aylmer: group then? So, I totally appreciate what you're saying there, 118 00:07:12,830 --> 00:07:16,000 Sean Aylmer: Peter. But in the case of Crown particularly, there are 119 00:07:16,000 --> 00:07:19,680 Sean Aylmer: a number of people on that board who they're not 120 00:07:19,730 --> 00:07:22,740 Sean Aylmer: unique in this by any stretch. Didn't really know what 121 00:07:22,740 --> 00:07:24,910 Sean Aylmer: was going on day to day. And to be honest, most 122 00:07:24,910 --> 00:07:26,470 Sean Aylmer: boards don't know what's going on day to day. 123 00:07:27,080 --> 00:07:30,960 Peter Deans: Well, I think on that last point meant we've probably got another session on the role of 124 00:07:30,960 --> 00:07:36,040 Peter Deans: boards more generally. But I think the directors irrespective of 125 00:07:36,040 --> 00:07:37,990 Peter Deans: the size of the company or how much they're paid. 126 00:07:38,220 --> 00:07:41,280 Peter Deans: They are actually paid to know what's going on. And 127 00:07:41,470 --> 00:07:44,700 Peter Deans: I think what came out of Crown was that some 128 00:07:44,700 --> 00:07:48,179 Peter Deans: of the directors clearly saw the part- time role as 129 00:07:48,370 --> 00:07:52,230 Peter Deans: being very, very high level governance and oversight. And probably my 130 00:07:52,230 --> 00:07:54,850 Peter Deans: terms a little G and a little O, governance and 131 00:07:54,850 --> 00:07:58,990 Peter Deans: oversight. But ultimately, I think there's an expectation that directors, 132 00:07:59,050 --> 00:08:01,990 Peter Deans: even if they are part- time roles, do need to 133 00:08:02,180 --> 00:08:06,720 Peter Deans: have a depth of understanding of the industry, the regulatory 134 00:08:06,720 --> 00:08:10,880 Peter Deans: frameworks that they're involved in and financial services and casinos 135 00:08:10,880 --> 00:08:14,730 Peter Deans: and gaming. It's very heavily regulated industries, and I don't 136 00:08:14,730 --> 00:08:16,990 Peter Deans: think you could really let the directors off by saying 137 00:08:17,240 --> 00:08:19,730 Peter Deans: it's a part- time role. Therefore, they couldn't know what we is 138 00:08:19,870 --> 00:08:22,970 Peter Deans: going on. I think that's really the skill that good 139 00:08:22,970 --> 00:08:26,530 Peter Deans: directors have is, even though they may only be coming 140 00:08:26,530 --> 00:08:30,390 Peter Deans: in once a month for a day or two, and the larger 141 00:08:30,390 --> 00:08:34,120 Peter Deans: organizations, it's probably three or four full- time days a 142 00:08:34,120 --> 00:08:38,540 Peter Deans: month. I think you've got reasonable expectation that directors know 143 00:08:38,830 --> 00:08:42,059 Peter Deans: this. I think where the challenge comes. And this does 144 00:08:42,110 --> 00:08:43,819 Peter Deans: get talked about quite a bit, is where you've got 145 00:08:43,820 --> 00:08:49,059 Peter Deans: directors with large portfolios of five and six boards. It 146 00:08:49,059 --> 00:08:51,270 Peter Deans: may actually be difficult to be across all of the 147 00:08:51,270 --> 00:08:55,870 Peter Deans: issues, to have side conversations with the executives to get 148 00:08:55,870 --> 00:08:59,000 Peter Deans: to know the CEO outside the formal construct of the 149 00:08:59,000 --> 00:09:01,100 Peter Deans: board. And, and I think that's where a lot of 150 00:09:01,100 --> 00:09:04,429 Peter Deans: the more savvy directors are saying, I really want to limit the 151 00:09:04,429 --> 00:09:07,270 Peter Deans: number of board roles they have, because I think realistically, 152 00:09:07,809 --> 00:09:10,610 Peter Deans: it's difficult to do more than three or four, certainly 153 00:09:10,610 --> 00:09:13,140 Peter Deans: if they're larger, more complex businesses. 154 00:09:13,660 --> 00:09:16,640 Sean Aylmer: Okay. So Crowns board did accept your recommendations. You wrote 155 00:09:16,640 --> 00:09:19,910 Sean Aylmer: a report for the Victorian Royal Commission on the Crowns 156 00:09:19,910 --> 00:09:23,130 Sean Aylmer: board's governance and risk management. What were some of the 157 00:09:23,130 --> 00:09:26,370 Sean Aylmer: recommendations or at least the main ones that they accepted 158 00:09:26,370 --> 00:09:30,641 Sean Aylmer: of your recommendations, which kind of addresses exactly what you're talking about? 159 00:09:30,641 --> 00:09:38,170 Peter Deans: Yes. There was a number. There's 22 recommendations in total. Some of the more important ones for Crown 160 00:09:38,170 --> 00:09:42,059 Peter Deans: ultimately was a reasonably complex business because it had the 161 00:09:42,059 --> 00:09:45,179 Peter Deans: Melbourne casino, it had a Perth casino, it was in 162 00:09:45,179 --> 00:09:48,940 Peter Deans: the process of building Sydney and it under the regulatory 163 00:09:48,940 --> 00:09:52,179 Peter Deans: licensing requirements had to do a whole lot of things 164 00:09:52,179 --> 00:09:57,020 Peter Deans: around organizational oversight and compliance. And Crown actually had a 165 00:09:57,020 --> 00:10:01,729 Peter Deans: series of governance bodies and management committees for both Melbourne 166 00:10:01,730 --> 00:10:04,520 Peter Deans: and for Perth. And I think at the end of the day, there 167 00:10:04,980 --> 00:10:08,310 Peter Deans: was an element of, we thought that board or that 168 00:10:08,410 --> 00:10:11,660 Peter Deans: audit committee was doing certain things. And it was a 169 00:10:11,660 --> 00:10:15,600 Peter Deans: bit like the fingers pointing each way. And ultimately, you 170 00:10:15,600 --> 00:10:18,440 Peter Deans: didn't actually have a lot bubbling up to the Crown 171 00:10:18,440 --> 00:10:21,730 Peter Deans: Resorts board level, certainly, and not in the way you 172 00:10:21,730 --> 00:10:23,839 Peter Deans: would expect to see it given the nature of its 173 00:10:23,840 --> 00:10:28,610 Peter Deans: regulatory requirements. And, also the audit committee at Crown Resorts, 174 00:10:28,610 --> 00:10:33,720 Peter Deans: somewhat paradoxically never really actually received any audit reports per 175 00:10:33,720 --> 00:10:37,790 Peter Deans: se. And whilst the charter did talk about audit responsibilities, 176 00:10:37,790 --> 00:10:39,610 Peter Deans: it was a little bit light on. And, it was 177 00:10:39,610 --> 00:10:42,800 Peter Deans: really because it was actually delegating down to some of 178 00:10:42,890 --> 00:10:45,720 Peter Deans: the other government's forums. I think the other area, which 179 00:10:45,720 --> 00:10:47,550 Peter Deans: is probably a bit of a lesson for sub boards 180 00:10:47,550 --> 00:10:51,630 Peter Deans: more broadly, was it just didn't from my review, seem 181 00:10:51,630 --> 00:10:55,000 Peter Deans: to spend enough time discussing in depth, a lot of 182 00:10:55,000 --> 00:10:58,710 Peter Deans: the risk issues it had. And, this is only my 183 00:10:58,710 --> 00:11:02,160 Peter Deans: speculation, but I did feel a bit of a sense 184 00:11:02,160 --> 00:11:05,510 Peter Deans: of they were talking themselves into the fact that particular 185 00:11:05,510 --> 00:11:08,220 Peter Deans: issues had been addressed, whether it was anti- money laundering 186 00:11:08,220 --> 00:11:12,150 Peter Deans: or whether it was around conduct within the casinos. So, 187 00:11:12,490 --> 00:11:15,330 Peter Deans: there was an element of probably say, it's groupthink. I 188 00:11:15,650 --> 00:11:17,730 Peter Deans: didn't use that term in the papers, but there was 189 00:11:17,730 --> 00:11:20,450 Peter Deans: an element of, they talked themselves into the fact that 190 00:11:20,450 --> 00:11:23,780 Peter Deans: everything was okay. And, you saw parallels with that in 191 00:11:23,780 --> 00:11:28,679 Peter Deans: the financial services, Royal Commission. Where, the boards ultimately felt 192 00:11:28,679 --> 00:11:31,950 Peter Deans: that they were satisfied, everything was okay or wasn't possibly 193 00:11:31,950 --> 00:11:35,150 Peter Deans: as bad as it was. But history has shown, that 194 00:11:35,150 --> 00:11:35,980 Peter Deans: wasn't the case. 195 00:11:36,360 --> 00:11:40,760 Sean Aylmer: So, you sort of refer to this. But other companies 196 00:11:40,760 --> 00:11:44,360 Sean Aylmer: outside gaming and even outside banking, what can they take 197 00:11:44,360 --> 00:11:47,570 Sean Aylmer: from this, particularly boards? It's almost, if you're not sure, 198 00:11:47,570 --> 00:11:50,719 Sean Aylmer: ask the question or stay away from groupthink? 199 00:11:51,640 --> 00:11:56,610 Peter Deans: Yes. Well, it's certainly highlighted to directors, the personal and 200 00:11:56,610 --> 00:12:01,220 Peter Deans: reputational downside of taking for granted either what you read 201 00:12:01,220 --> 00:12:04,709 Peter Deans: or being told by management. And boards and executives do need to have 202 00:12:05,120 --> 00:12:09,600 Peter Deans: a collaborative approach and relationship. But ultimately the board and 203 00:12:09,600 --> 00:12:13,469 Peter Deans: individual directors do need to think about, am I being told the 204 00:12:13,470 --> 00:12:18,179 Peter Deans: right things, is what's being presented to me accurate? So, 205 00:12:18,179 --> 00:12:21,250 Peter Deans: I think there's a question I would always pose with 206 00:12:21,250 --> 00:12:25,120 Peter Deans: directors on, is there a sufficient challenge underway with management? 207 00:12:25,120 --> 00:12:27,300 Peter Deans: I think that's an important one. I've sort of sat 208 00:12:27,510 --> 00:12:30,610 Peter Deans: on the executive side of the table and it can 209 00:12:30,610 --> 00:12:34,720 Peter Deans: be a bit confronting being challenged by directors and you 210 00:12:34,720 --> 00:12:36,200 Peter Deans: always get a bit of a sense of, well, do 211 00:12:36,200 --> 00:12:39,530 Peter Deans: they trust me? But ultimately I think directors and boards 212 00:12:39,530 --> 00:12:41,890 Peter Deans: need to sort of sit back and think about, is 213 00:12:41,890 --> 00:12:44,929 Peter Deans: what I'm being presented and the answer being given, are 214 00:12:44,929 --> 00:12:48,450 Peter Deans: they really what's happening? And, I think what we've seen 215 00:12:48,450 --> 00:12:51,309 Peter Deans: with both Star and Crown is that they were independent 216 00:12:51,460 --> 00:12:56,130 Peter Deans: parties brought in. And perhaps they won't listen to enough or 217 00:12:56,130 --> 00:12:59,809 Peter Deans: perhaps some of the findings were dismissed a little bit 218 00:12:59,809 --> 00:13:02,849 Peter Deans: out of hand and the boards accepted what was presented. 219 00:13:02,850 --> 00:13:05,429 Peter Deans: So, I think that challenge process is important. I was 220 00:13:05,429 --> 00:13:07,250 Peter Deans: also just going to say, I think the other thing 221 00:13:07,390 --> 00:13:10,730 Peter Deans: particularly smaller to medium size listed companies is that a 222 00:13:10,730 --> 00:13:13,660 Peter Deans: lot of them either don't have an audit and risk 223 00:13:13,660 --> 00:13:15,809 Peter Deans: committee or they might just have a merged audit and 224 00:13:15,809 --> 00:13:19,220 Peter Deans: risk committee. I think the roles of both are fundamentally 225 00:13:19,220 --> 00:13:22,260 Peter Deans: different. And if you look at the ASX principles and 226 00:13:22,260 --> 00:13:27,000 Peter Deans: recommendations, they do talk about the importance of having, an 227 00:13:27,000 --> 00:13:29,740 Peter Deans: audit committee and also a risk committee. And, I think, 228 00:13:30,820 --> 00:13:32,290 Peter Deans: what we've seen in the last couple of years with 229 00:13:32,290 --> 00:13:35,740 Peter Deans: the pandemic, the rise of cybersecurity. I think there's a very 230 00:13:35,740 --> 00:13:39,500 Peter Deans: strong argument for boards to set up dedicated risk management 231 00:13:39,559 --> 00:13:44,040 Peter Deans: committees and also have some management resources such as a 232 00:13:44,040 --> 00:13:47,210 Peter Deans: risk management department or a chief risk officer, that is 233 00:13:47,210 --> 00:13:49,170 Peter Deans: actually looking at these issues. 234 00:13:49,590 --> 00:13:50,221 Sean Aylmer: Peter, thank you for talking to Fear and Greed. 235 00:13:50,221 --> 00:13:52,870 Peter Deans: Great to be back again. Thanks. 236 00:13:53,360 --> 00:13:55,990 Sean Aylmer: That was Peter Deans, a former chief risk officer and 237 00:13:55,990 --> 00:13:59,600 Sean Aylmer: founder of Notwithoutrisk Consulting and of course, an independent expert 238 00:13:59,600 --> 00:14:03,160 Sean Aylmer: advisor to the Victorian and Western Australia Royal Commissions into Crown 239 00:14:03,340 --> 00:14:05,960 Sean Aylmer: casino. This is the Fear and Greed daily interview. Join 240 00:14:05,960 --> 00:14:08,099 Sean Aylmer: us every morning for the full episode of Fear and 241 00:14:08,100 --> 00:14:12,069 Sean Aylmer: Greed, Australia's most popular business podcast. I'm Sean Aylmer. Enjoy 242 00:14:12,070 --> 00:14:12,470 Sean Aylmer: your day.