RIMS report looks at why organizations are moving from ERM to strategic risk management
- Published: Tuesday, 20 October 2020 08:41
For the past 30 years, enterprise risk management (ERM) programs have helped organizations proactively identify and address risks, however, many times it provides limited insight into strategy and strategic risks, according to a new RIMS report, ‘Pivoting from ERM to SRM’. In the report, members of the RIMS Strategic and Enterprise Risk Council look at best practices for successfully accelerating ERM into a well-designed and executed strategic risk management (SRM) program.
With supporting detail from the previously published RIMS SRM Implementation guide, the report examines: why pivoting is necessary; SRM’s relationship to ERM; gaps between ERM and SRM; game-planning to pivot; identifying strategic risks; and techniques and tools.
Additionally, the report highlights these key drivers for risk leaders to shift from ERM to SRM:
- SRM reframes risks, positioning them as opportunities rather than impediments;
- SRM links executives who are accountable for strategy with operations leaders;
- SRM assigns and establishes ownership to effectively manage strategic and emerging risks.
“Every organization’s ‘pivot’ or journey from ERM to SRM will take on a different form,” according to the report. “Strategic risk considerations are core to informed risk-taking in pursuing opportunities and anticipated rewards. Risk professionals have a unique perspective and insight into the organization that allow them to provide additional value through SRM.”