ERM becomes truly part of how companies do business
15 Nov '07
3 min read
More Findings: • Executives surveyed indicate that in 2006, 34 percent of their corporate boards, up from 29 percent in 2004, believe that ERM is significant or highly significant in carrying out their stewardship roles. • There are substantial differences in ERM maturity across industries: financial services, energy, and utilities have more developed ERM processes than other industries. However, there has been rapid growth in ERM in the healthcare sector over the past years. • Companies that are outside of North America have developed processes at a faster pace and have a higher rate that are up and running. • Implementing ERM in a company generally takes three to five years. And companies often find they start and restart crafting an ERM framework that is viable for their particular organizations. • Among core business functions (e.g. legal, CFO, CEO, Board), there is general agreement on the importance of ERM; nearly 1/3 of each of these functions consider ERM to be of critical importance to their business.
“Once adopted and implemented broadly throughout the firm, ERM becomes truly part of how companies do business,” says Ellen Hexter, head of The Conference Board Enterprise Risk Management Center and author of the report.
“The goal is to create greater awareness of risk and reward tradeoffs, and to drive risk thinking and appropriate risk management throughout businesses.
Ownership is a critical operational and cultural component to enterprise risk management. When risks are identified and assigned to individuals, there is likely to be greater accountability for each risk and greater understanding of how any specific risk impacts a business.”
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