Another issue is of talent shortage. Ramesh Pillai, chairman of the IERP®, emphasized that Risk Management is not Enterprise Risk Management. Often, what Malaysian professionals refer to is not the latter, but Operational Risk Management, Financial Risk Management, and the like. He pointed out that unlike the accountancy profession, for example, there are no widely-accepted qualification pathways for risk managers. As such, there can be discrepancies in knowledge, skill levels, and competencies among professionals in the field even though all might be designated ‘risk manager.’ The function of the CRO is not only to answer to the Board and CEO, but also to have the requisite expertise and clout to challenge them on key decisions if needed.
Key Takeaways
Some asked: is it necessary to attempt to quantify the value of ERM in the first place?
As attendees shared about their experiences, common themes emerged, including the struggle of articulating the value of ERM to their management or board members when the business is already ‘doing well.’ Those who had the support of management in this area, including Allan, had a relative amount of freedom and time to experiment with improving the efficacy of ERM for their organizations, allowing them to adjust processes, implement enterprise-wide initiatives, and so on.
All in all, the questions raised during the discussion also pointed to fundamental issues every company has to examine at some point of their lifecycle: can we survive or grow by functioning as usual? When do we need to transform our processes and ways of working and planning? Attendees concurred that there is value to ERM, especially for the long-term future of their organizations. The challenge is for everyone else to see it, too.
While it might be impossible to quantify its granular impact, those seeking to gain support in implementing ERM can perhaps focus on promoting its capacity as an efficient management system. That is, facilitating an enterprise-wide culture of risk awareness while providing structures that accommodate value creation, achievement of strategic objectives, and identification of new strategic opportunities.
5 The IERP® Monthly Newsletter September 2018