“Solving the Enterprise Risk Management Puzzle: Secrets to Successful Implementation” and companion volume “Enterprise Risk Management Tools and Templates” have been selected as course texts for Laval University’s ERM course ASR-4004 Gestion intégrée des risques en entreprise.
According to the text, controls are used to assess whether the organization’s actions are the ones expected; to check that the organization’s processes are functioning as intended. Originally connected with detecting errors and fraud, they are now related to organization’s goals, financial reporting and compliance.
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In my last post on Lean Manufacturing, I said that there was a broader agenda at stake — namely, the survival of firms in the era of the decline of western manufacturing. Consultant Bill Chambless expresses a similar thought in his book Quantum Profits. He posits that the mastering of short-run customized production is the key to economic recovery.
Should risk managers delve into Lean Manufacturing, or similar methods, at all? One of the key themes in this blog is the necessity for risk managers to expand their view and gain a seat at the planning table. It is only natural, after implementing risk assessment methods, to feel that one might add value by seeking better productivity.
There is a broader agenda here. The very survival of manufacturing and service industries is continually challenged, and the opportunities for gains are immense, both in administrative and industrial processes.
Planning and Innovation – Small-Medium Sized Enterprise
I am Planning and Innovation Lead for a small-medium sized enterprise in specialty metals manufacturing. Read the rest of this entry »
In the RIMS 2012 report “The Evolving Role of the Risk Professional”, recommendations included that risk managers view risk in a new way that “builds internal alliances, and enhances the strategic decision-making capability”; this in turn would require “specialized communication and technical skills”. According to a Deloitte study, however, risk professionals are still perceived as working in silos, using limited skill sets. This post examines the risk manager’s required competencies.
The Definition of Risk
The definitions of risk given in the standards (e.g., ISO, COSO, AS/NZ) give the basis of my argument. They connect risk with organizational goals and objectives. These definitions imply the expansion of risk management beyond the conventional scope of corporate finance/audit and commercial insurance. New aspects of the risk management function — 6 specific roles — are discussed next. Read the rest of this entry »
In this second post, I give my proposed definition of both Enterprise Risk Management and Risk Assessment. They are not a reflection of the actual usage of the terms; instead, they are recommendations for what the terms should denote:
Definition of Enterprise Risk Management
Enterprise Risk Management: A distributed process of risk assessment applied to strategy and operations, in all domains, in support of corporate goals and values.
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Here are links (some not appearing in previous posts) germane to the case study of Enterprise Risk Management implementation at Camosun College.
RESOURCES AND REFERENCES
New Employee Manual
President’s Welcome Message
So far in this series of posts, we have seen the genesis of the ERM program in the decision by the Board of Governors; the project team’s review of background materials; and the decision to begin with a trial risk assessment applied to the strategic plan. Now we consider how ERM was developed and rolled out to the rest of the organization.
DEVELOPMENT OF ERM PRACTICE
Conclusions Drawn from Initial Risk Review
The trial risk assessment of the strategic plan yielded a risk register addressing all the main strategic objectives. The plans for mitigation developed by the executive were, for example, to adjust program…