This post continues my “essence of ERM” series. The goal of this series is to address all manner of
This post is about risk and opportunities.
I often hear that risk management should help an organization find opportunities as much as control potential problems. COSO says that part of risk management is the identification of events which could have a positive impact, a negative impact, or both. This concept does not work for me on multiple levels. In a future post I’ll write more about the idea of event identification. In this post I want to address a more practical strategic problem with this approach.
One of the toughest hurdles in risk management is explaining it in a way that makes it relevant to executive management. You need their support. The more that you ask executive
The essence is that linking a risk management function with the identification of strategic opportunities is a tough sell. It is hard enough to get executive management excited about risk management at its most easily understood and intuitive level. Don’t confuse the basic message with unproven claims that your executive team may find counter-intuitive.
You can read more about my view of risk management (which I call Performance Risk Management) at Risk Leader (rskldr.com).