The Importance of Enterprise Risk Management
In the past, risk frameworks were mostly concerned with mitigating losses. Risk management was often seen as a ‘tick-box’ exercise that organisations complied with grudgingly. Risk managers were appointed to manage risk and a silo approach prevailed — with various departments like quality, work health and safety or finance taking on responsibility. Much of the risk attention was on the “things that might go wrong”.
Today, risk management is far more focused on creating and protecting value, “the things that must go right”. It is used to understand uncertainty and to assess risk against the objectives of an organisation. Boards and owners have specific obligations to ensure risk management is part of their governance arrangements and that a positive risk culture is established. This helps see the “totality” of risk and to assist with sound decision making, improved performance and to prevent harms.
What Is Enterprise Risk Management (ERM)?
ERM is a well-developed methodology for organisations to manage risk. It’s a coordinated “whole of organisation” approach that takes in to account the totality of risk and ensures consistent practices, processes and monitoring. An organisation’s ERM approach is documented in the Enterprise Risk Management Framework. The framework generally sets out three main components: governance of risk, processes for risk assessment and resources to support risk management. One of the most important roles a board / owner has is to set the tone for risk management and design and authorise its enterprise risk management framework.
We can help! We support organisations to transition or strengthen their risk frameworks; to ensure it is aligned to better practices and supports an effective risk culture. We also conduct independent assessments of progress and assist with strategies that support boards with their responsibilities and to assist management to embed the framework throughout the organisation. We can also guide specific aspects of the framework, such as clinical governance, incident management, workforce risks and safeguarding to prevent abuse frameworks.
For more information about how ERM can help your business thrive, check out our latest helpful guide: How do you thrive as a business?
How Can ERM Help Your Organisation?
Sound risk management is critical to the achievement of business success more than ever before. No organisation can afford to have risk management last on its agenda! Risk governance is under the spotlight and the messages to organisations from reviews and inquiries is clear: traditional risk management doesn’t cut it!
Taking proactive steps to improve ERM in an organisation assists to:
Boards and executives are accountable for effective risk management. Have you recently checked on the capabilities and effectiveness with risk management in your organisation?
Where Can I Get Further Information & Support?
Ansvar can assist you to understand the effectiveness of your current approach to risk management and guide you to improvement opportunities.
We support your journey with expert governance and risk consultancy, risk workshops and training, tools and templates, online sector specific risk packages and provide access to our risk partners to provide you specialist systems and advice.
For more information, please contact the Ansvar Risk Team and your enquiry will be directed to one of our Senior Risk Consultants who will respond to you directly.