ENTERPRISE RISK MANAGEMENT – THE ULTIMATE RUBIK’S CUBE
Enterprise Risk Management (ERM) is the ultimate solution. Once we get this right, we can sleep at night because we are completely prepared. Whether it is evaluating an acquisition, fund investment, new business, or the existing business, we have all the pieces necessary to navigate for continual success. After all, is not ERM the means to identify the sustainability and dependability of revenue and components that impact cash flow? OK, maybe not, because risk is for prevention, or then maybe to satisfy stakeholders, or the mantle needed to demonstrate compliance with prescribed rules and mandated policies. Of course, we can utilise COSO, ISO 31000, guidelines from the NYSE and SEC, etc.
As a trained risk practitioner and reader of thousands of ERM articles and numerous methodologies, an ultimate solution gets my mind spinning as there are so many footprints none can be seen. This brings us to the Cube – The Rubik’s Cube. Referencing Wikipedia permutation approach, suffice it to communicate there are 43 quintillion possibilities for the Rubik’s Cube. This is fine for engineering or challenging your intellect, but we are in business. We want useful and effective ERM – so how to untangle?
The key to the puzzle is to utilise a methodology that is founded in common sense. We have all worked with professionals who ‘get it’. They have a grasp of what is important and how to apply information. Thus, the business mind is the lead. Regulatory, legal, reporting and other mandated requirements need to be included. We refer to these as the ‘prescribed requirements’. It is also important to recognise that many of these prescribed requirements contribute to sound business decisions and ERM.
Oct-Dec 2013 Issue
Women Corporate Directors