ERM, or enterprise risk management, has become increasingly popular in recent years as businesses of all sizes have embraced the comprehensive approach that involves continual input aimed at managing all risks faced by a company. But before you can develop strategies to address emerging risks, you need to build a framework that can provide your company with an overall assessment of its risks and its risk level.
When building an ERM framework for your company, think of it as a powerful viewing platform that lets your business gain an overall appreciation for the risks that must be addressed throughout the entire company. Not sure how to begin? Here are a few guidelines to get your started:
Appoint a steering committee.
Establishing a committee to oversee the entire process will help your company stay focused on the end goal and it will also help avoid duplication of effort that can wind up costing time and money.
Assign responsibilities.
Assign the roles and responsibilities of all the key players who will contribute to your ERM plan. To avoid confusion, roles and responsibilities should be clearly defined and written down for review and reference.
Identify risks and prioritize them.
Ask for input from all your ERM participants to determine which risks are most pressing, and decide the order in which every risk should be addressed before developing mitigation plans.
Design plans to monitor and report actions and results.
Unless you track your results and outcomes, you won’t know what’s working and what’s not. Have a system in place for regular reporting so all team members can be held accountable.
ERM is a dynamic and ongoing process designed to evolve with your business. To ensure the best outcomes for your business, reviewing your ERM program should be a continuous event that involves stakeholders from all levels. Yes, it’s work — but it can provide tremendous benefits.
