Implementing ERM across multi-entity organizations: Key challenges and an innovative solution

Introduction

The U.S. market today is increasingly composed of large, multi-entity organizations – those with several subsidiaries, legal entities or decentralized operating units such as private equity firms, hospital systems or higher education systems. Managing risk in today’s complex world is difficult, at best, however these multi-entity organizations face the unique challenge of managing risk across the vast enterprise. The myriads of risks across these large, diverse entities can threaten financial stability, damage reputation, disrupt operations and hinder successful scaling and growth. The need for consistent and effective risk management has never been more critical.

Enterprise risk management (ERM) as a discipline has been widely known to enable organizations to generate consistent risk intelligence across business units and operating entities. When executed in alignment with recognized frameworks—such as COSO[1] and ISO 31000[2] — standardization improves strategic alignment, transparency and comparability of risk information, while strengthening governance and overall performance.