WHY ISN’T ERM MORE OF A TEAM SPORT AT YOUR ORGANISATION?
After all the business disappointments, failures and even frauds, you might assume enterprise risk management (ERM) is now greatly valued – that everyone understands ERM must be a team sport, with monitoring risk being the responsibility of each player.
Regrettably, it appears most people do not feel this way, and that increased failures and frauds will occur before substantial changes in corporate culture and practice take place.
Avoid or embrace? In fact, numerous surveys indicate a substantial number of business professionals intend to do as little as possible regarding ERM planning. They mistakenly view it as some version of ‘Sarbox hell’, where vast amounts of money are expended with seemingly minimal strategic or operational return.
On the flip side, some respondents enthusiastically promote the value of ERM for corporate governance. They passionately describe ERM’s favourable effects on company cultures, the key elements of its successful integration, and their personal investment of political capital in the process, so as to set a visible and positive tone from the top down.
These respondents are true believers in the important value ERM can provide. Note, of course, that most believers were converted after surviving a business disaster that a properly performed ERM would have solved, mitigated or averted entirely. This, in itself, is plenty of reason to be an ERM proponent.
Jan-Mar 2016 Issue
FiscalDoctor