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What it takes to lead in risk management: An interview with Madelyn Antoncic
Journal of Risk Management in Financial Institutions,
9
(1),
6-16
(2016)
Abstract
Madelyn Antoncic discusses risk and business issues from her nearly threedecade career that extends over every modern-day financial crisis while serving at the Fed and many leading financial firms — Goldman, Lehman, Barclay’s, the World Bank and now Principal. She is a recognised thought leader in the risk management profession. Dr Antoncic shares her CRO perspective from time spent at Lehman Brothers during the apex of the financial crisis and her treasurer’s perspective at the World Bank during the EU’s sovereign debt crisis. She reflects on the importance of governance and that risk culture is always set from the tone transmitted from the top of the organisation. Even though Dr Antoncic and her team had been publically recognised at Lehman for building a best-in-class risk system, the risk management team was overruled when riskiness issues encountered commercial interests. She had been quoted in the press before Lehman had entered into its death spiral that ‘the biggest risk is complacency, the biggest risk is no-one wants to listen’. At the World Bank Dr Antoncic oversaw a US$140bn portfolio while developing investment products to meet specific client needs. She and her team developed catastrophic risk structures which helped countries mitigate and transfer such risk. Dr Antoncic emphasises that risk managers, or anyone overseeing the management of assets with a fiduciary responsibility, need to have the courage of their convictions and raise their hands when they see things that are not right as she has done and has been recognised for throughout her career. In her prescription for improvements in risk management, Dr Antoncic views technology as one of the most important tools of the risk profession. With it, risk managers can develop best-in-class models, but with incomplete data or the wrong data, the results are meaningless. But technology is not the only important ingredient. She believes risk managers need to understand the business so they can be a partner with business — be a sounding board not just a reporting function. And most importantly, she believes good governance is the key ingredient to a meaningful risk-aware culture. Dr Antoncic believes that in some institutions there is still too much concentration of power, still not enough checks and balances. She describes one of the big causes of the financial crisis as being inconsistent regulation and enforcement. At that time there were varied financial institutions taking the same risks and engaged in the same businesses yet regulated differently because of how they were incorporated or how they were chartered. This problem — regulatory arbitrage — still exists today in many respects, notwithstanding the good works of the regulatory community.
Keywords: risk management; Lehman; World Bank; risk managers; systemic risk; risk regulation
The full article is available to subscribers to the journal.
Author's Biography
Dr. Madelyn Antoncic is a Senior Fellow, Development Research Institute (DRI), New York University. She is a Member of the Board of Directors and Risk Committee of ACWA Power, Saudi Arabia and S&P Global Ratings. Dr. Antoncic most recently was Senior Advisor to UNCTAD on ESG and SDG Reporting; was CEO of Global Algorithmic Institute, an early-stage start-up NGO using Big Data to track corporate SDG reporting; and CEO of SASB. She is a former Vice-President and Treasurer of the World Bank. Her experience spans global financial markets across all asset classes in large, complex, global financial institutions in both the private and public sector. She began her career as an Economist at the Federal Reserve Bank of New York, followed by various senior market roles at Goldman Sachs, Barclays Capital, Lehman Brothers and Principal Global Investors. She has published widely on ESG issues and has served as a judge of Corporate Sustainability Report (CSR’s) competitions for both UNCTAD-ISAR’s and the Asia Sustainability Reporting Summit, respectively. She is known for her leadership in financial innovation including implementation of national climate-related disaster risk reduction and mitigation structures to help emerging and developing economies transfer climate-related disaster and other risks to the markets to enable them to be more fiscally resilient. Dr. Antoncic is an internationally recognized industry leader and expert on risk management, ESG and governance. She is the subject of many risk management and governance graduate school case studies concerning the Great Financial Crisis. She is a frequent speaker and key note including at high-level fora such as at the UN General Assembly (UNGA), SDG Business Forum Plenary; the Ministry Economy, Trade and Industry (METI) Tokyo, First Annual TCFD Summit; UNCTAD-ISARs; G20 Greening the Financial System: Financing for Sustainable Growth and Development; World Bank and IMF High-level Global Infrastructure Forum on Mechanisms to Increase Infrastructure Finance; the UN Climate Change Summit; The Sandai Dialogue, Mainstreaming Disaster Risk Management in National Development Planning. Her awards include First Prize Honoree of the International UNCTAD-ISAR Honours 2020, with GAI for Harmonizing Corporate Sustainability Reporting; the Fulbright Scholars Award for International Cooperation; National Partnership for Women and Families award for Leadership sharing the stage with Senator Christopher J. Dodd; Risk Manager of the Year; was named among the 100 Most Influential People in Finance; listed among top thought leaders helping shape (and reshape) accounting in 2020 and beyond; received the Women in Business, Distinguished Alumna award; and the Girl Scouts Annual Tribute award. She is a member of the Board of Overseers of Weill Cornell Medicine of Cornell University and the Editorial Boards of the Journal of Risk Management in Financial Institutions; and the Journal of A.I., Robotics & Workplace Automation. She is a former Board member of One-to-World supporting Fulbright students and scholars; the World Bank Group Pension Finance Committee, as Vice-Chairman; the Public Sector Issuers Forum, as Co-chair; Barclay’s Capital Board and member of the Executive Committee of the Board; and the Board of Directors of the Girl Scout Council of Greater New York. Dr. Antoncic holds a Ph.D. in Economics, a minor in Finance from NYU; was an Alfred P Sloan Foundation Doctoral Fellow and a member of the adjunct faculty at NYU Stern’s graduate and undergraduate schools.
Citation
Antoncic, Madelyn (2016, January 1). What it takes to lead in risk management: An interview with Madelyn Antoncic. In the Journal of Risk Management in Financial Institutions, Volume 9, Issue 1. https://doi.org/10.69554/NMHT5232.
© Henry Stewart
Publications LLP
Publications LLP