lunes, 27 de junio de 2011

ERM in the News - June 10, 2011

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ERM in the News

 

Volume 4, No. 8

June 10, 2011

 

The Enterprise Risk Management Initiative (ERM Initiative) at North Carolina State University's Poole College of Management is sending you this brief e-mail newsletter to highlight the following recent ERM-related news:

 

1. World Economic Forum Launches Risk Response Network

2. Homeland Security Risk Management Fundamentals

3. Exceeding Expectations of the Board: Boosting Internal Audit’s Role in Risk Oversight

4. Embracing Enterprise Risk Assessments to Enhance Impact of Internal Audit

5. The Five-Course Meal of Enterprise Risk Management

6. Pay Attention to Low Probability Scenarios

 

See the following for additional information:

 

World Economic Forum Launches Risk Response Network

The World Economic Forum has launched its Risk Response Network that will help facilitate the oversight and response to complex and interconnected global risks. The Forum’s permanent staff assigned to the Risk Response Network will help provide a global focus on the array of risks arising from economic inequalities, failed governance systems, natural disasters, cybersecurity, and resource scarcity to strengthen global leaders in their ability to more proactively oversee and respond to these, and other, complex risks. Read about the Network and watch the video emphasizing need for global risk focus.

Homeland Security Risk Management Fundamentals
The Department of Homeland Security (DHS) plays a critical role in leading a unified effort in the management of the diverse and complex set of risks facing the United States. To strengthen capabilities in fulfilling its mission, DHS has created a Risk Management Fundamentals to provide a structured approach for the distribution and use of risk information and analysis efforts across the Department. The publication lists key principles, discusses approaches, and explains the process of effective risk management intended for DHS organizations and personnel to adopt. Read more

Exceeding Expectations of the Board: Boosting Internal Audit’s Role in Risk Oversight
New risks and opportunities will continue to evolve for organizations as they continue to experience significant change and expansion. Boards, in particular the audit committee, will continually need to evaluate the adequacy of management’s ability to manage top risk exposures, including whether internal audit is proactively identifying and assessing management’s oversight of emerging risks. A recent Deloitte Audit Committee Brief notes that internal audit needs to embrace a heightened focus on risk management activities and governance and they need to expand their role from primarily auditing, operational, and regulatory risks to also encompass a focus on strategic and emerging risks. Read more

Embracing Enterprise Risk Assessments to Enhance Impact of Internal Audit
While management holds primary responsibility for enterprise risk assessment, a recent Journal of Accountancy article emphasizes that internal audit can enhance its role in organizations by engaging more in enterprise risk management oversight. The article highlights tips on how to improve an organization’s internal audit function, based on an interview with Protiviti’s executive vice president and head of global internal audit. The suggestions include conducting risk assessments, identifying emerging risks, evaluating IT security and privacy, and developing and distributing talent, among many others. Read article

The Five-Course Meal of Enterprise Risk Management
Enterprise Risk Management projects can be intimidating and difficult to manage due to the large time and effort involved. An article published by Property Casualty 360 asserts that breaking down ERM projects into multiple courses is the best way to tackle the daunting task. The courses include developing a project plan, identifying risks, assessing risks using metrics, risk reporting and monitoring, setting effective controls, and utilizing strategic analysis. Read article

Pay Attention to Low Probability Scenarios
Low probability disaster scenarios tend to be overlooked by organizations, but they deserve more attention and planning, according to management expert Stuart Greenbaum at the Olin Business School at Washington University in St. Louis. An effective Enterprise Risk Management program should consider all inherent risks and potential disasters to protect the organization from additional direct and indirect costs, and reduce the probability and impact from catastrophic events. While an effective ERM program couldn’t prevent natural disasters, such as the recent tsunami in Japan, it provides a disciplined structure that encourages business leaders to more robustly consider the impact of low-probability events to their operations. Read more

 

The ERM Initiative provides executive education for boards of directors and senior executives focusing on the integration of enterprise risk management with strategic planning and board risk oversight. Contact us at ERM_Initiative@ncsu.edu or 919.513.0901 for further details or visit our website at www.erm.ncsu.edu.

 

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