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Creating Value out of Enterprise Risk Management

At our Tea Talk session on 12th September, IERP® faculty member Zaffarin Zanal gave a featured talk on Creating Value out of ERM. Zaff started off by stating that—to strong murmurs of agreement across the room of risk practitioners—implementing ERM is hard.  The typical difficulty with implementing ERM is that while risk professionals understand the value for ERM, the top management (as well as the rest of the organization) might not readily see its value. Zaff noted that when something has perceived value, psychologically there is a ‘pull factor’ to it. It doesn’t require much forceful selling (the ‘push  factor’).

He shared that from the results of a 2017 ERM Benchmark Survey which showed that whilst enterprise risk management is a ‘popular’ framework being implemented in organizations, management and line managers are still quite resistant to it. The challenge lies in establishing that pull factor when risk management is so often seen as tedious, bureaucratic, and expensive. To treat this particular ‘acceptance risk’, it is important to understand the potential causes. Read more

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3 Benefits of Developing Emotional Intelligence as an Enterprise Risk Practitioner

In implementing enterprise risk management in your organisation, people will be your most important resource. It doesn’t matter whether you are seeking to establish or support enterprise risk management in your organisation, making strategic decisions for your company, or managing the talent.  Establishing a good network of working relationships is essential to your success as a risk practitioner, and developing your emotional intelligence is what will enable you to influence top decisions and culture in your organisation – without using overly aggressive, fear-based tactics.

Emotional intelligence is more than just being a decent human being (though some have trouble with that, too). It is the ability to understand emotions, both yours and others’, so that you can manage your behaviour and have healthy connections with others. Some are predisposed to having more emotional intelligence than others. However, it is a set of skills that can be developed and improved upon to the benefit of your career growth as well as your job effectiveness. Read more

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Towards an Objective-Centric Approach to Risk Management

With Enterprise Risk Management becoming increasingly institutionalized, global best practices are continually under revision as international standards-setting bodies such as ISO or COSO seek to improve on ERM methods and guidelines. A core development in recent years has been the recognition that an objective-centric approach to ERM yields greater outcomes compared to the traditional taxonomy approach. At the same time, the constant evolution of ERM practices means that there is often a gap where organizations are slow to correct outdated methodologies – due to the complexity and resources required to change existing processes, structures, and culture.

Conventional risk management is based on taxonomies, which create an often inductive process for risk assessment. Risk is identified and aggregated into a static and ‘stable’ set of categories, then prioritized according to likelihood and impact. The limitation to this approach is that risk is not stable. While taxonomies allow for a certain level of customization across different business units, their success and efficiency is predicated on the use of a standard and somewhat rigid set of categories and shared language – ultimately ineffective for large corporations facing wide-ranging risk complexities. Read more

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Distinguishing Between ERM and ORM Approaches

On May 4, over 20 professionals from across industries attended a Tea Talk session at the IERP® International Secretariat. Our keynote speaker for this session was Mr. Ramesh Pillai, Chairman of the Board of Governors of the IERP® and Group Managing Director of Friday Concepts, an ERM, GRC, and BCM boutique consultancy. Speaking on distinguishing between Enterprise Risk Management (ERM) and Operational Risk Management (ORM) approaches, he aimed to dispel common misconceptions of the two related but different approaches.

He noted that more attention has been placed on Operational Risk as of late as a result of geopolitical volatility and technological disruptions. The possible escalation of conflict and the deterioration of interstate ties, for example, are genuine concerns that would have far-reaching effects across the interconnected global economy. With a large range of risk factors to consider, an organization can face up to thousands of risks at a time, most of which are constantly changing and need to be re-evaluated as such. In such an environment, it is essential that risk management moves from a siloed approach towards a more integrated and dynamic one. Read more