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.