Recent ERM Research

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  Research on Current State of Enterprise Risk Oversight

   

  Research just released by the faculty in the ERM Initiative at North Carolina State University finds that while the volume and complexities of risks affecting enterprises today are increasing extensively, risk oversight is fairly immature, ad hoc, and a source of frustration for most executives surveyed. A majority do not maintain any risk inventories, and 74% do not provide reports from management to the board of directors describing the entity's top risk exposures. Nevertheless 51% indicate their risk culture is one that is either "strongly risk averse" or "risk averse." Download full report to see key findings based on 701 executives responding to the survey>>

 

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ERM News

• Beasley Speaks at NYSE Risk Management Conference

  The New York Stock Exchange (NYSE) hosted a June 4, 2009 conference Challenges and Solutions of Managing Risk: A Return to Enhancing Shareholder Value for representatives of NYSE registrant firms. Mark Beasley, NC State's Deloitte Professor of Enterprise Risk Management served as panelist on "Building ERM into Planning, Strategy, and Culture." Read More >>

• Continued Focus of SEC on Linkage of Compensation and Risk

  SEC Chairman Mary Schapiro continues to shed insight about the SEC's current focus on more proxy disclosure requirements related to the linkage of compensation and risk. A statement released on June 10, 2009 provides additional perspective about the SEC's consideration of proposals that would require greater disclosure about how a company manages risks, including how compensation structures impact not only short-term risks, but long-term risk implications as well. Additional compensation disclosures are also under review. Read More >>

• Root Causes: Breakdowns in Risk Management and Lack of Common Sense

  Speaking about financial regulation in the wake of the economic crisis, Federal Reserve Governor Daniel K. Tarullo discusses the massive breakdown of risk management and the suspension of simple common sense in his June 8, 2009 speech at the Peterson Institute for International Economics. Governor Tarullo notes that "If we have learned anything from the present crisis, it is that systemic risk was very much built into our financial system." He later frames a post-crisis regulatory program. Read More >>

• Global Risk Management Survey Results

  A recent AON survey of risk managers and chief risk officers highlights the top ten risks facing businesses in 2009 and also highlights key aspects of effective risk oversight. Survey results indicate significant progress towards risk oversight improvements, as there has been an increase in risk preparedness for the top ten risks from 60 to 70% over the last two years, while other findings suggest areas in which many companies have room for improvement, such as the finding that only 44% are tracking their total cost of risk. Read More >>

• Benchmarking the State of ERM

  Chief audit executives and heads of internal auditing were surveyed by the Institute of Internal Auditors to determine the state of ERM in organizations. Findings indicate there is progress being made but there are still many areas that warrant improvement. Over two-thirds of those surveyed have a formal or informal risk management program or process in place, but over 70% have not reached a sustainable risk management maturity level and almost 68% do not use technology to monitor risks. The leading obstacle to risk management implementation is lack of senior level support. Read More >>

• The Increasing Importance of Reputation Management

  Reputation can comprise from 65 to 95% of a company's market capital and can be lost in an instant. A recent Conference Board Review article emphasizes the importance of managing an organization's reputation, describing ways in which the field is changing, and identifying actions companies can take to protect their reputations. Read More >>

• Strengthening Three Lines of Defense in Risk Management

  The current economic crisis is calling for re-examination of approaches to effective risk oversight. A strengthened risk culture and a renewed focus on basic underpinnings of effective top-down risk oversight may provide the most effective improvement. Read a recent whitepaper that emphasizes three important lines of defense: top management and the front office; the risk management function; and audit. Read More >>

• ERM Resource Center

  Practical insights about effective techniques for effective Enterprise Risk Management. Read More >>