07 Sep 2011

Weighty and academic frameworks such as ERM can become unworkable, either because they’re overly complex or their detailed demands prevent people achieving their daily business objectives, says Gerry Robinson, a risk management professional and author of The Risk Thinkers Guide.

“Research into the implementation of ERM has shown that while more than 50% of executives surveyed had board risk committees, 60% didn’t have an integrated risk management strategy, 54% didn’t evaluate controls effectiveness and 35% didn’t conduct enterprise-wide risk assessments,” Mr Robinson says.

After two years researching and writing The Risk Thinkers Guide, he concluded it is possible develop a risk management process in a day and implement it in a few weeks – providing you steer clear of “lofty ERM ideas”.

You need to understand the fundamentals of corporate governance, risk management and compliance. A comprehensive but rational and practical risk management process can then be created in a day. Successful implementation involves analysing risk, evaluating it, treating, monitoring and reviewing it.

Templates will be needed for key areas including:

• An enterprise risk library
• A risk ranking criteria
• A set of minimum standards for managing each risk
• A minimum standards gap analysis that allows you to
o diagnose major weaknesses
o develop low cost improvement plans
• Manual or electronic monitoring that enables you to embed risk management and have a dynamic, sustainable process.

If you want to learn more, The Risk Thinkers Guide is available through good online bookstores.

Gerry Robinson is Practice Manager Business Risks at RiskTech Pty Ltd, www.risktech.com.au