I was honoured to be included on a panel at this years FEI Canada’s annual conference held in Winnipeg in June 2015. A large audience attended the session on Leading Practices in Implementing Risk Management. This subject is evidently top of mind at many organizations in Canada. In writing this article which appears in the FEI Newsletter, I have summarized the key takeaways in a format that will be useful for busy senior executives and board members looking to stay current on best practices in formalized risk management.
There was a general recognition on the panel that formalized risk management is being practiced more and more by executive teams and boards, and increasingly focusses on linking the key strategies of the organization with the key risks. A key driver of ERM (Enterprise Risk Management) appears to be a growing acceptance in Canadian firms of analyzing key risks from all areas of the enterprise, not just financial risks, highlighting the rise in visibility of risk exposures in such as regulatory, environment, human resources, legal and in other areas. While black swans cannot be always foreseen, formally identifying, assessing and managing those risks linked to key corporate strategies better prepares an organization for events which could cascade from a black swan occurrence. ERM is successful generally when it has the full support, understanding and buy-in of the CEO, the C-Suite and by a board which participates regularly in risk oversight. In building new ERM programs, some organizations have spent too much effort developing detailed risk profiles that they haven’t really gotten value out of, versus using the information to challenge their risk mitigation effectiveness.
To read the entire article and link to the FEI Newsletter, click here.