Enterprise Risk Assessment

The most urgent risks facing an organization must be regularly identified, prioritized and clearly defined in order for them to be effectively addressed.  An enterprise risk assessment utilizes a collaborative process to access the wealth of risk knowledge embedded within the line, management and executive levels of the organization.  This process results in the prioritization and in-depth understanding of key risks.  These results serve as the foundation for effective risk management mitigation and impact reduction initiatives.

ERM Start-up

Some guiding principals for initiating ERM :

1. •The program and activities associated with ERM provide demonstrable benefits to the organization
   

2. •ERM activities are not duplicative to or disruptive of existing enterprise activities such as budget development, strategic planning or performance appraisal.  Where appropriate, these activities should be integrated into these enterprise processes
   

3. •The ERM program design minimizes incremental efforts of executives, management and other process participants
   

4. •Resources allocated to ERM are no bigger or costly than is appropriate to meet the need of the organization
   

Elements of ERM start-up can include:

1. •Create a vision for the implementation of ERM which fits the specific operations and culture of the organization to include such items as:
   

oDocumentation of existing risk management activities

oStatement of risk appetite or tolerance

oOrganizational structure for ERM implementation, participants, reporting and oversight

oIdentification of complimentary enterprise activities and determination of the extent of potential integration

oERM value statement for communication throughout the organization

1. •Design and execute a first phase ERM implementation plan to include:
   

oArticulating the key business objectives of the organization

oCreating a common risk language

oIdentifying and prioritizing the risks or events which could impact the achievement of the business objectives

oFor priority risks, coordinate and report on risk mitigation activities

oDesign and issue ERM progress reports and key risk status

1. •Develop a plan for further roll-out of ERM which can include:
   

oReviewing options for risk management roles within appropriate areas of the organization

oSelecting and documenting a detailed design of organizational approach to ERM

1. •Responsibilities
   

2. •Guiding policies and processes
   

3. •Supporting methods, tools and technologies
   

4. •Business unit risk assessments
   

5. •Reports
   

6. •Developing an enterprise risk register
   

oManual

oExcel or other existing software

oUse-specific technology.

1. •Further refinement of risk mitigation actions