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ERM – Enterprise Risk Management: Not a one-size fits all programme

Posted on by aldopuch

Dan Baldwin from Leggett & Platt discusses the importance and complexity of managing ERM in an organisation. 

ERM – The Art and Science of Enterprise Risk Management

(…) Risk is a big part of life and business. If you take no risks, you limit your potential for success. If you take too much risk, you may threaten your survival. This is why I believe ERM is as much art as it is science. You need to establish certain risks like health and safety that are absolutely unacceptable—hence our zero tolerance for accidents. Other risks that are more financial in nature are more acceptable to bear, but knowing where you verge into the unacceptable is what ERM is really good at. For this you need risk experts. Fortunately, they are at hand in most organizations. (…)

Identifying and assessing risks in an organisation 

The functional heads at the corporate level are committee members, including the CFO, treasurer, vice president of IT and the vice presidents of tax, legal, audit and accounting. I lead the committee, although the CFO participates very strongly in the meetings. The process initially involved everyone identifying the risks that confront us strategically, operationally and financially. Once we identified these risks, we assessed them from a severity and frequency standpoint. (…)

Not a one-size-fits-all for ERM programmes

We found out that there is no such thing as a one-size-fits-all ERM program. You need to suit the program to your organization’s particular culture and risk profile. We also learned that you don’t simply flip a switch and the ERM program is done—it is a continuous improvement process that evolves slowly. (…)

This is an extract from an interview, if you want to read more go to: Risk Management Magazine

If you want to learn more about the latest trends in operational risk, corporate governance or AML you can attend one of Eureka Financial courses in London and Dubai. For more information go to: www.eurekafinancial.com

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Eureka Financial offers over 100 public and in-house training courses in banking and finance, corporate finance and M&A, risk management, operations, investments, wealth management, soft skills and managementFor more details visit: www.eurekafinancial.com

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