Knowledge is the primary benefit of an ERM assessment.
Increasing the bottom line and value is the sustainable result of integrating an ERM plan.
ERM is increasingly recognized as an integral part of an organization’s risk strategy even though internal barriers to evaluation and implementation exist. Organizations and individuals often find it difficult to recognize the value of implementing an ERM assessment and maintaining an ERM plan so owners, managers and stakeholders must break through these barriers and recognize the necessity and significance of ERM and its worth to their business and profits.
Risk management has traditionally been perceived as a tactical function with the aim of adding to shareholder value, risk avoidance/mitigation, process consolidation, and silo elimination all off which are worthy results but they do not fully describe the strategic significance of ERM value measured through traditional metrics such as return on investment, return on equity, return on assets or risk adjusted return on capital. ERM implemented as a strategic discipline will quantify and define ROI, ROE, ROA and RAROC.
An effective ERM strategy adds value by creating and improving efficiency, decreases cost of risk, cost of borrowing and eliminates IT and operational redundancy. Aligning ERM practices with organizational structures, enterprise goals and utilizing the discipline to achieve strategic objectives, in addition to operational and financial objectives will lead your organization to greater success and sustainability.
Leadership is paramount. Lack of leaderships buy-in, limited funds or decentralized operations should not hinder the need to initiate an ERM assessment or derail the successful implementation and application of an ERM plan. The use of an ERM program can lead to greater success. Remember that loss avoidance matters in a financially challenged environment and increasing the “risk intelligence” of an organization will result in increased value and profits.
Contact Corporate Services Network, today, to schedule your ERM Assessment.