All industries are upgrading their enterprise risk governance, and the banking sector is leading the way. Though some changes are specific to each industry, some changes are popular across all industries. To make a successful transition, you must have clear visibility of the enterprise’s processes and functions. In this article at Ethical Boardroom, Peter White explains how you can successfully implement enterprise risk governance.
Steps to Enterprise Risk Governance
Once you realize your enterprise’s requirements regarding risk management, you will be able to plan the next set of steps. Here is the process to follow for successful enterprise risk governance:
Strategy and Vision
Since you know your end goal, come up with strategies that would help you achieve that. You should also have a concept in mind that you can map to the strategies.
Modify Risk Roles
Organizations have risk management teams that focus on identifying and mitigating risks. Since the crisis has forced organizations to cut corners, you must revisit and refine some of these roles. Businesses now consider CEOs as risk owners, so they must ensure that enterprise risk governance has no gap.
Encourage Enterprise-wide Ownership
Everyone within the organization should be a part of the risk identification and mitigation process, while the board and CEOs frame the governance chart. The chief risk officer (CRO) and chief financial officer (CFO) must perform risk assessments and report results.
Due to the recent global crisis and the following financial crunch, boards are reviewing the risk governance format. While some companies are making small tweaks, the rest are going for a total transformation of tools, processes, and functions.
Align with Standards
Though companies might have some specific ways of dealing with risks, have industry best practices in place. Use terms, approaches, KPIs, and other metrics that enable smooth enterprise risk governance. Establish a viable framework to get stakeholder support and tackle risks across the business units.
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