While it was never the intent of Winston Churchill that his famous description of Russia’s intentions in 1939 would apply to Enterprise Risk Management (ERM), the analogy applies pretty well. “It is a riddle, wrapped in a mystery, inside an enigma, but perhaps there is a key.” I firmly believe there is a key to a proper, productive and easily understood ERM program.
This week North Carolina State University’s Poole College of Management will hold a two-day workshop on ERM. Mark Beasley, the Director of the ERM Initiative, has developed a first-class graduate program curriculum and is recognized as a leader in ERM thought leadership. I am expecting the workshop to be well attended by senior leaders in the risk management field and will be providing updates as they become available.
The ALS Group has been involved in ERM since my initial visits to Australia and the UK in 1997. ERM concepts were well established through guidance documents such as Turnbull (UK) and ANZ4360 (AUS). The International Organization for Standardization (ISO) has reached an agreement with Standards Australia to migrate the ERM standard developed in the 1990s into ISO 31000, a globally recognized ERM standard today. ERM is an important concept when a company thinks about risk. It allows you to answer these fundamental questions:
- What can go wrong?
- How bad can it get?
- What can I do about it?
The answers are an essential foundation for proper risk identification and management.
ERM is (finally) getting a degree of traction in the US, and the question is no longer, “Should we do it?” but instead, “How do we do it?” Developing an ERM process so it matures in alignment with the company and provides commercially balanced value is challenging. There are vast amounts of departmental data to gather, analyze and question thoroughly. It can spin into a very time-consuming process which quickly becomes a burden for senior leadership and, as a result, the process wanes.
ALS has helped our clients work through a measured maturity model which provides relevant information in increasing detail as an organization’s maturity and appetite increase. I will be sharing more about the conference and ERM concepts in the next couple of weeks.
About the Author
Albert Sica is the Managing Principal with The ALS Group. You can read more about Al or contact him here.
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