One of the biggest benefits of ERM, he confirmed was improved decision-making when it came to making new investments and entering new markets. But he stressed that everyone needed to know the company’s mission and vision, and objectives and goals needed to be harmonised across the organisation. A major challenge was getting buy-in from all stakeholders; ERM is difficult to quantify in the short term. A lot also depends on the tone from the top, and ERM needs to go through a process; it will not happen overnight.
Advising the incorporation of risk thinking into everyday operations, he said that this could improve business operations at all levels but the organisation needed to be clear about what it wanted to extract from risk management as a strategic objective. With risk management, the organisation has better control over the unknown. It is not just another compliance programme, but it is everyone’s job. Ultimately, it will help everyone identify what is keeping them from achieving their objectives as they engage with their work.
As an oil & gas MNC, Petronas already has a risk framework that is applied organisation-wide, including in Petronas Chemical & Refinery Sdn Bhd, Maheran said. Agreeing with Allan that risk management starts with the tone from the top, and that commitment from management was key, she added that what the company wants to achieve has to be clearly defined so that the necessary processes can be put in place to manage risk. In this environment, communication is imperative and should be continuous between internal and external stakeholders.
Mindset was key, she said, particularly when transitioning from project level to business operations; this meant moving from an academic or theoretical approach to practical exercise – the real thing.
26 The IERP® Monthly Newsletter December 2021