Article
Now, more than ever – the importance of ERM in a crisis environment
Aug. 18, 2020 · Authored by Cassandra Walsh, Corey Parker
The importance of ERM
Enterprise risk management (ERM) has long been a powerful tool for organizations looking to optimize their risk management functions. Now, more than ever before, we are seeing an uptick in organizations embracing and leveraging the risk-aware culture to move their ERM program forward.
ERM is the framework through which organizations proactively identify, assess, mitigate, monitor and respond to risks and opportunities. Integrating ERM into an organization’s daily culture and operations will provide a channel toward informed decision-making, coordination of risk-related activities and a link between the organization’s strategic plans/objectives and the enterprise risks, while flowing down to all risk-related activities and decisions.
Before embarking on the ERM journey, it is critical to develop a foundation that provides an ERM framework customized for the unique aspects of the organization.
The Why – why this approach can add value
While there is no one-size-fits-all or cookie cutter approach to ERM, an organization’s risk management activities can quickly become disconnected, inconsistent and/or siloed without a sound ERM framework. An integrated ERM framework will enhance decision-making and risk management activities, leading to a consistent and proactive approach across the organization.
The creation of an ERM framework will drive not only accountability over time, but it will transform risk management into a sustainable business approach that integrates seamlessly into the daily routines across the organization and links to the strategic goals and objectives of the organization.
Developing a strong ERM foundation
Risk management activities are already an active component of most organizations. It can be challenging from the inside of an organization to conceptualize an ERM framework. In fact, this is where most stop: asking, “Where do I start?” A critical first step in laying the foundation for a sustainable ERM framework: Begin by identifying and inventorying the risk management activities already in existence.
A simple, yet valuable next step: convene an
