Using Monte Carlo Simulation to Support Decision-Making

My first interview with Hans Læssøe last month covered a wide-range of topics, including background on what led Hans’ former company to adopt ERM and a few factors key to its success. In this interview, we discuss a topic I’ve touched on briefly in previous articles but haven’t elaborated on much, until now. Monte Carlo…
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Coronavirus Response Not Always About Minimizing Harm

Unless you have been living under a rock for the last couple of months, you have undoubtedly heard about COVID-19, a new type of coronavirus. In a daily report from the World Health Organization for March 9th, there are close to 110,000 reported cases worldwide. Sadly, the virus has claimed the lives of just over…
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Will the Wells Fargo Settlement Actually Result in Change?

In some of my prior articles on reputation and positive risk culture, I’ve sometimes referred to the ongoing Wells Fargo saga. From 2002 until coming to light in 2016, the company engaged in a variety of fraudulent activities. Unrealistic sales targets aggressively pushed by leadership led many employees to create thousands of bogus accounts. The…
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7 Tips for Reducing Business Continuity Risk for ERM

Here’s a situation that is all too common… A company hires a new director for ERM. This person’s job is to design and implement an ERM process for helping executives make risk-informed decisions and understand threats and opportunities to achieving strategic objectives. At some point, this ERM Director decides to leave the company and the…
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Real-Life Example of Robust Enterprise Risk Management

Today we have a special guest – Hans Læssøe. As you may know, Hans’ perspective is something I reference often here on the blog. We finally got a chance to catch up! In this interview, Hans and I discuss his background, what led his former company, LEGO, to adopt ERM, and a few factors key…
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Protecting Trade Secrets: Finding the Right Balance

Out of all potential sources of a company’s value, tangible or intangible, trade secrets are often the most valuable.  While the theft of trade secrets is nothing new, it is an ongoing and growing problem that leads to over $300 billion in annual losses according to the Commission on the Theft of American Intellectual Property.…
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Are Qualitative Risk Assessments Fatally Flawed?

Early last month, I published an article explaining why I don’t discuss quantitative assessment methods like modeling, Monte Carlo simulation, and others very much and what companies must have in place before they can use methods like this to guide their decision making and strategic planning. In short, without establishing corporate governance policies, a strategic…
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Why Organizations Struggle with Key Risk Indicators and How to Make them Work

If done properly, key risk indicators (KRIs) can be a valuable tool for proactively managing risks to achieving strategic objectives. As I explain in a previous article, being proactive is one of the key differences between traditional and enterprise risk management. Despite their potential for facilitating the proactive management of risk, around 70% of organizations…
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Are Top Risk Reports Really Helpful to Organizations?

As we enter a new year (…and a new decade), it’s always a good idea to take a step back to see what may impact organizations in the year ahead. Every fall, NC State’s ERM Initiative, in partnership with Protiviti, surveys C-suite executives and Boards across a variety of industries to gauge what they see…
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4 Considerations for Building Effective ERM Presentations

No doubt you’ve attended presentations that were unengaging and downright boring. You were glad they were over, but also upset that the last 1-2 hours of your life were a waste. Being on the other side can be even more frustrating, even demoralizing… You spend hours developing an extensive 30 (or even 50!)-slide PowerPoint presentation.…
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