Management SystemsRisk Management

What Is the Best Enterprise Risk Management Strategy?

Does the word ‘digital disruption’ sound familiar? The reason is that you are living through one of the most turbulent periods of history. Due to the COVID-19 pandemic, supply chains and third-party relationships were strained causing adverse effects on the market. Therefore, businesses must have operational resilience to avoid widespread disruption. As governance, risk, and compliance concerns evolve, it is crucial for businesses to have a robust integrated risk management plan. This article on LinkedIn by Roy Millard speaks about the convergence of governance, risk, and assurance to craft a robust strategy for enterprise risk management (ERM).

GRA Framework for Enterprise Risk Management

All three elements-governance, risk, and assurance (GRA)-are equally essential and codependent within ERM’s holistic thinking and planning.

In governance, initiatives, programs, and portfolio outputs, results, and benefits are defined and managed. Governance manages the work’s deployment and realization of value by exerting financial and technical control.

An event or condition can adversely affect achieving specific goals if it is deemed to be a risk. Risk management is the process of managing such risks.

Assurance is giving stakeholders the confidence that a project, program, or portfolio will achieve its intended objectives.

You can ensure successful engagement by considering all three when establishing and managing initiatives. An ‘iron triangle’ emphasizes the equal importance of each factor and their mutual dependence.

GRA Framework Complements ERM

All organization’s requirements are dynamic. The stakeholders’ expectations, reporting requirements, risk appetites, and company priorities are just a few variables that change regularly. Therefore, an organization’s GRA framework should be flexible and updated at regular intervals to reflect the speed at which these aspects change.

Projects are a small part of an organization’s overall operations. They play a vital role in achieving part of the organizational strategy. In this way, a project’s governance, risk management, and assurance frameworks function within a broader organizational framework.

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