The evidence suggests that Fraser Bank’s preference for resolving conflicting risk and return
objectives was via negotiation in a characteristic Risk and Value Management framework.
The resulting agreements represented the compromise that was expected to be reached within
Fraser’s consensus-oriented culture. Reconciling competing risk-return interests across the
business units in the course of the planning process was a formidable technical and political
exercise that risk capital controllers gradually learned to resolve.
Maintaining credible risk capital allocations for the purpose of risk-return optimisation
required a great deal of political aptness on the part of risk capital controllers. However, their
contribution to the workings of the Group’s VBM framework was so endemic that it was
taken for granted and invisible in the eyes of top-level decision makers. Hence the paradox of
getting the politics of risk management right: by doing so, the risk function turned invisible –
a mere cog in the wheel of value creation.