Article

How modern ERM can help you prepare for this era of uncertainty  

May 22, 2025 · Authored by Corey Parker, John A. Rogula

Uncertainty has always been part of the business landscape – but today’s environment feels markedly different. Geopolitical tensions, regulatory volatility, shifting trade policies and the downstream effects on supply chains, financing and operational strategy are creating levels of unpredictability that many organizations haven’t encountered in years, if not decades. 

What makes the current moment unique is the extent to which this uncertainty is being actively driven by the current political landscape. Regardless of one’s political stance, though, the reality is clear: the unpredictable environment surrounding tariffs, trade agreements, regulatory rollbacks and international relations has injected unprecedented volatility into the marketplace. 

Unlike uncertainty that arises organically from market disruptions, this is uncertainty born from the highest levels of government, creating a reactive environment where financial executives and risk leaders are constantly forced to ask themselves: What might happen next, and how can we be ready for it? 

For chief financial officers, controllers and chief risk officers, this situation presents a particular challenge. The traditional approach to risk management – prioritizing events based on their likelihood -- is insufficient in a world where highly impactful, seemingly unlikely events are becoming more frequent and consequential. Financial leaders must embrace a new mindset (and modern tools) to help them navigate this volatile landscape. 

Why a modern ERM approach matters now

In this climate of constant change, a proactive enterprise risk management (ERM) strategy isn’t just a nice-to-have – it’s essential. Modern ERM programs must take a comprehensive view, addressing financial, operational, regulatory, external/environmental, strategic and technological risks — what we at Baker Tilly call the FOREST risk taxonomy. This framework ensures organizations consider risks beyond the traditional financial or regulatory focus areas, capturing emerging threats and opportunities across the full spectrum of business operations. But it’s not just about identifying risks.  

It’s about understanding how external and internal factors intersect and what that means for your business strategy, financial stability, operational resilience and stakeholder value. Critically, organizations need to break from the outdated habit of giving equal weight to both impact and likelihood. In today’s environment, uncertainty isn’t synonymous with unlikeliness. In fact, the probability of highly disruptive events – whether politically, economically or technologically driven – is rising. 

Take the pandemic as a case in point. Many organizations had the risk of a global health crisis in their risk registers but because it seemed unlikely, they de-valued the risks rather than giving more focus to the potential impact such an event could have. Those that had engaged in scenario-based planning and stress testing, however, were far better positioned to manage the situation effectively. 

At Baker Tilly, we believe ERM isn’t just about protecting against downside threats – it’s a performance-enhancing mindset that should be directly connected to an organization’s strategy. Done right, ERM helps organizations identify opportunities, build operational agility and make better-informed strategic decisions amid uncertainty. By aligning risk management with strategic objectives, organizations can ensure their risk responses and scenario planning actively support operational resilience and long-term growth.

How Baker Tilly can help: AI-enabled ERM tools 

Recognizing these challenges, Baker Tilly has developed a suite of AI-enabled ERM tools designed to help organizations not just manage risk, but turn uncertainty into opportunity.  

To help organizations confront today’s risks and seize tomorrow’s opportunities, Baker Tilly offers a suite of proprietary, AI-enabled enterprise risk management tools that help clients better understand and manage uncertainty. These solutions go beyond traditional risk assessments, leveraging advanced analytics and real-time collaboration to improve decision-making and enhance business resilience. 

Together, these tools reduce the time and manual effort required to maintain a robust ERM program while enabling leadership teams to manage uncertainty more effectively. 

Importantly, these solutions also help shift the mindset around risk management — from reactive crisis response to proactive performance improvement. It’s not just about what might go wrong; it’s about positioning your organization to succeed regardless of what comes next. 

A new path forward 

At Baker Tilly, we understand that integrating ERM into the fabric of an organization’s decision-making culture takes time and discipline. Changing behaviors and embedding a proactive risk mindset isn’t a one-and-done initiative – it’s an ongoing process. 

That’s why we advocate for a continuous, AI-supported ERM strategy that delivers actionable insights and drives meaningful business outcomes. By continuously monitoring, scanning and evaluating both risks and opportunities through a structured, data-driven process, organizations can build resilience while staying agile enough to capitalize on emerging trends. 

ERM can and should be viewed as a tool for framing uncertainty in terms of both risk and opportunity. The organizations that thrive in this era of unpredictability won’t be those that merely react to events as they occur — they’ll be the ones that anticipate scenarios, build operational agility, and develop flexible, risk-informed strategies for whatever comes next. 

Baker Tilly’s suite of ERM tools equips your organization with both the information and the methodology to manage today’s volatility and prepare for tomorrow’s possibilities. With the right approach, uncertainty becomes less of a threat and more of a competitive advantage.