In the aftermath of the global financial crisis, increasing pressure from corporate boards and senior leadership, investors, shareholders and regulators has elevated Enterprise Risk Management (ERM) to a 'corporate imperative' status. The consequences of failing to see through systemic issues and test the long term viabilities of corporate strategies is now well understood. Also exposed were the inadequacies of regulatory structures, which previously may have proliferated a box ticking mindset to risk management. Regulators have taken some steps at ensuring that an integrated risk assessment and a proactive approach to risk oversight are central to sustainable growth.
It would probably be fair to state that the global financial crisis has brought the discipline of Risk Management into the limelight. The regulatory framework for Risk Management and oversight has undergone a major overhaul in several countries. As organisations around the world are coming to grips with specific guidelines such as the Board's oversight of Risk Management practices, linkage of executive compensation with risk, additional disclosures on Risk Management, etc., it is important to step back and ask the simple but pertinent questions about Risk Management:
||Are today’s Boards well equipped to deliver effective risk oversight?|
||Where are organisations most challenged in linking risk to strategy?|
||Is Risk Management considered as fundamental to the achievement of business objectives?|
||Is Risk Management about realising the upside or is it only about minimising the downside that businesses could be exposed to?|
||Will Risk Management continue to be equally important as 'normalcy' is restored in the developed markets?|
||What is it that organisations need to do to?|
Developing, deploying and maintaining a practical, holistic risk management approach can help organisations lead through immediate, long–term, and evolving risks and succeed in the new business environment.