With new Regulations coming into action continuously, it’s time for Companies globally to adopt an innovative and agile methodology for their Risk Management Strategy. While the basic concepts of ERM best practices remain the same, the focus has now shifted from just identifying and mitigating Risks to building robust Strategy that has the potential to maximize the value of Risk Management process.
ERM implementations across all Industry Verticals worldwide are now focusing on 3 vital questions:
- Do we have the ability to identify our Key Risk areas?
- Is the ERM Strategy Agile enough to recognize disruptive change & adapt to it ?
- Is the ERM Strategy in alignment with Business goals ?
Boards need to emphasize on stepping up their current ERM approach to the next level of efficiency and effectiveness. To achieve this, here are some best practices we suggest for Organizations wanting to have a 360 degree visibility into their Risks.
Adopting Emerging Technology Trends quickly and with ease
When any opportunity is created due to geopolitical, evolving technology or economic shifts, it is in the best interest of the Company to recognize the insight and act upon it as quickly as possible. This gives the Organization the time advantage of identifying emerging Risks and creates decision-making options for it’s Risk Management, Audit, Compliance and Governance teams. Resistance to change could restrict the Organization from making necessary adjustments to the business model and core operations.
Leveraging the power of Real time Risk Reporting
Risk Reporting should be agile and nimble in responding to a changing business environment. Conventional Risk Reporting is often not actionable enough to support decision-making processes. Inability to utilize data analytics to achieve market intelligence and increase efficiency may significantly impact the effectiveness of the ERM Process.
Significant Risks warranting immediate action by the Executive Management and the board should be escalated to directors’ attention in Real time. A process for identifying Emerging Risks should be in place to supplement the ongoing risk assessment process. Conventional Risk Management Strategies have only a holistic Operational picture which focus on Transferring, Alleviating, Avoiding and Responding to Risk. It has little or no scope to swiftly adapt to external Market fluctuations. Agility enhances the cohesiveness of a Company’s entire value chain as an Integrated Process in addition to improving performance of Individual Processes.
Leveraging the power of Artificial Intelligence to create customizable, easy to pull up Reports/Dashboards is what we at Confident Governance have been offering to Companies across all verticals and magnitudes. In the current scenario where Organizations are continually exposed to ambiguous internal as well as external Risks of challenging Regulatory environments, changing Technology landscapes and increased complexity in foreign operations, a shift from traditional Risk Management mindset to an Agile & Automated one is what will enable continuous growth with Transparency.
In our upcoming posts on Risk Management, we will give more insights on Risk Management trends for 2018 & beyond. Let’s stay Confident and Connected !
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