Many organizations have failed in their implementation of Enterprise Risk Management (ERM) because of unclear objectives, value drivers and management expectations. What is important to your board may not matter as much to your management team and vice versa.
As the ERM Champion in your organization, it is critical that you, your management team, and your board understand, prioritize, and agree upon your most important value drivers for ERM. Once you determine the preferred objectives, you can design the “right-sized” ERM process for your organization. Thereafter, you will be in a much better position to develop a meaningful roadmap for successful ERM implementation.
|ERM Value Drivers & Objectives||Primary Stakeholders|
|Reduce Reputation Damage and Operational Surprises||Board/ AC Chair/ CEO|
|Board Comfort and Confidence||Board/ AC Chair/ CEO|
|Achievement of the Organization’s Strategic Objectives||Board/ AC Chair/ CEO/Executive Mgmt|
|Risk-Informed Strategic Decisions||Board/ AC Chair/ CEO/Executive Mgmt|
|Portfolio View of Risk||Board/ AC Chair/ CEO/Executive Mgmt|
|Risk-based Capital Allocation||CEO/ Executive Mgmt /Bus Unit Leaders|
|Achievement of the Organization's Business Unit Goals||Bus Unit Leaders/ Managers/ Functional Heads|
|Risk-Informed Business Decisions||Bus Unit Leaders/ Managers/ Functional Heads|
|Risk Management Functional Synergies and Efficiencies||Executive Mgmt / Functional Heads|
|Cost Savings||Bus Unit Leaders/ Managers /Functional Heads|