Enterprise Risk Management, despite being on the tip of the risk and insurance world’s tongue, is still struggling to gain a foothold in most organizations. The question that consistently emerges is whether or not implementing an Enterprise Risk Management Framework can truly add value to a company’s strategic development. The key to a successful ERM Framework is to instill the philosophies of Enterprise Risk Management throughout the organization so the company as a whole is fostering a risk-aware culture.
A recent article in Risk and Insurance Management Society magazine touches on ten [supposedly] easy steps to implementing ERM into an organization. While each of these ten steps is vital to implementing a successful Framework, a few steps stand out which are fundamental to any risk-aware company: 1Taking inventory of what controls and processes already exist within your company; 2keeping it simple by going for the quick wins in identifying a company’s most material risks; and 3seeking help for your organization through executive support and people knowledgeable in their field. As you might expect, taking inventory of the processes that exist in your organization and achieving quick wins go hand in hand. If you are able to successfully complete these first two steps it will allow the ERM Framework to instantly grab foothold within your organization and achieve executive benefactors.
Seeking support is critical in establishing a successful ERM Framework. More importantly, earning and receiving executive buy-in will trickle down throughout the entire organization and reinforce the company’s commitment to the ERM Framework. It is equally important that an independent professional or group be brought in who are not only experts in ERM and risk management, but also have an understanding of your organization and are able to provide an independent view that would provide senior management with the transparency they need to improve any ERM process.
The ALS Group strongly believes in establishing an ERM framework in any organization. Typically our role is to work with senior management team(s) and evaluate the company’s processes and key risks. To become familiar with an organization we do a thorough Risk Management Assessment which includes a complete underwriting summary of a company’s key risks and operational business units. As such, this allows us to identify key risks, take inventory of successful processes that already exist within an organization, and provide complete transparency to help senior management translate these risks into opportunities. Establishing an ERM Framework is never easy but with the right help and due diligence this will provide a 3-dimensional approach to risk that every company needs.
If you would like to discuss the ERM process or possible ways to mitigate your company’s risk further please feel free to contact The ALS Group for more information.
Click to read the article, “10 Easy Steps to Implement Enterprise Risk Management”.
