Magazine article Risk Management

Three Keys to ERM Training

Magazine article Risk Management

Three Keys to ERM Training

Article excerpt

Employees often think of enterprise risk management (ERM) as just another level of bureaucracy they have to deal with. In fact, CEB research has shown that the leader of ERM's greatest fear is typically that it is considered another check-the-box exercise or low-value administrative initiative.

However, while most ERM teams strive to enable greater risk-informed decision making in their organizations and align their approaches with strategic objectives, very few effectively contribute to the strategic planning process even when they are involved. In fact, a recent CEB survey found that, while 62% of respondents said the ERM team owns their organization's risk training process, only 25% actually participate.

It is vital that employees at all levels are mindful of organizational risks. These could impact the company's ability to achieve strategic objectives, which in turn may hinder an individual's ability to achieve personal performance-based objectives. As the business environment becomes more interconnected, the importance of understanding the company's risks only increases. Thus, some of the best companies use the ERM team and process to help employees understand what risks the company faces and make risk-informed decisions.

Instead of one-sided training sessions, interactive boot camps can help embed ERM principles throughout the company. At one organization, the ERM team conducts a full-day workshop that consists of three main components. First, a classroom lecture by an ERM representative educates participants on the company's ERM philosophy, framework and application. Next, participants go through a series of simulated decision-making scenarios based on real-life examples. They are asked to create a list of top risks, assess the risks of a specific project and then devise a risk appetite statement that fits their assessment. …

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