erm program

Performance-Focused Risk Management: Tying It All Together

Today’s article is a reprint of the last of four guest editorials originally published in The Demotech Difference, a journal targeting small- to midsize property and casualty insurance companies. The first three articles in the series delved into the foundations of building a performance-focused risk management process, specifically the importance of culture, identifying the company’s…
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risk owners

3 Steps to Ensuring Risk Owners Ultimately Fulfill Their Obligations

It’s all too common…we ask someone to help with something just to be disappointed later. It’s frustrating…believe me I know. When it comes to managing risks and opportunities, we assign an “owner” to manage the day-to-day and ensure someone is responsible for the risk (and oversee the mitigation activities). As I discuss in this article…
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ERM best practices

Why Following ERM Best Practices Can Do More Harm than Good

Woven into many of my posts from the last 4+ years is the advice that ERM best practices should be approached with caution. While the updated COSO and ISO 31000 standards can be great starting points for some organizations, simply copying another organization’s policies and practices comes with many drawbacks that will eventually become painful.…
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ERM in the Spotlight

In times of great upheaval for industries or financial markets, organizations often turn to the formal discipline of enterprise risk management. After the 9/11 terrorist attacks and the 2008 financial crisis, for example, ERM gained traction as many organizations realized the significant drawbacks of a traditional siloed risk management approach. But widespread ERM adoption remains…
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Fewer Companies Realize Strategic Benefit from Risk Management Activities

Every spring, NC State’s ERM Initiative in partnership with the AICPA releases their State of Risk Oversight report. Data for the report was obtained through a survey sent to senior executives across a variety of industries this past fall. For this year’s report, 563 surveys were completed, which is a significant increase over prior years.…
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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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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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Why A Strong Governance Foundation is Vital to Successful ERM

When first speaking to an organization about ERM, executives know they have a problem, but they usually don’t know what it is, much less how to fix it. All they know is ERM is a possible solution. But before jumping in, I often find trouble spots that need to be addressed first. If they are…
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