Getting Ready for ERM
Before actually implementing a ERM, it is important to understand the importance of Risk Management by every individual in the organization. Following steps can help in implementing a successful ERM:
Involve Senior Management and Board in ERM process
Senior Management sets the example for the organization and their involvement helps in sticking to a preset schedule.
Appoint a strong leader to drive the ERM initiative
Since ERM is a enterprise wide activity, a strong leader is a very important part of successful ERM program. Such person should directly report to the Board.
Create a Risk Committee
Risk committee helps in bringing all risk issues on the table and provides a platform for a though-full risk assessment. There can be sub-risk committees depending on the size of the organization which finally report in to Risk committee. Forex – There can be a sub risk committee for all business (where all business heads should discuss possible risk issues and solutions) and another for all support functions (where all respective unit heads should discuss possible risk issues and solutions). Important risk issues from above two committees should go in to Top Risk Committee where Senior Management should discuss risk issues and possible solutions.
Train employees at every level
Train of all employees is must as to uncover each and every risk in the organization, every employee should understand what is risk and its importance.
A program to raise awareness among every all stakeholders is also very important. Awareness can be raised by starting competitions, newsletters and other events so that Risk Managements sets in to the culture of organization.