Time for teamwork – North America, Part II

The study, which was made in partnership with Marsh, found that the views of risk managers and top executives are increasingly convergent when it comes to the future direction of their organisation. The former are being called upon more often to provide input into strategic decisions, it revealed. "Risk management is moving from a transactional role to be more engaged in strategic planning," said Carol Fox, Director Of Strategic And Enterprise Risk Management at RIMS. "For the first time in many years we have seen an alignment between C-suite and risk managers in terms of the top three priorities for the group in relation to risk management," said Yvette Connor, Managing Director, Global Risk Management at brokerage Marsh. The survey is annual and is now in its 10th edition.hideThe three priorities are to improve the use of data and analytics, facilitate training and education and strengthen ERM capabilities. The order of the three top priorities differed however, with C-suite executives placing more emphasis on training and education, while risk managers lifted data and analytics to the top. But the convergence was interpreted by Ms Connor as a sign that some degree of alignment is underway. "It suggests that at least in terms of where we are today, we are beginning to speak the same language about what the future could and should look like for the organisation," she pointed out. Ms Connor also said that in order to continue enhancing their strategic role, risk managers must be able to make business cases based on metrics and analytics. For her part, Ms Fox stressed that, in addition to supplying data, risk managers must strive to interpret the raw figures. Three out of every four respondents said their companies need to make deeper analysis of their risk-related data. "A director once told me that he received a lot of data, but not much information in the risk report," she mentioned as an example. "At the board level, they want to know what is important and what is relevant for the objectives of the organisation." The survey showed that 52% of executives and 47% of risk professionals believe that the main reason for risk management’s inclusion in strategic planning is identification and assessment of the risks arising from a strategic plan. In addition to that, 46% of the C-suite executives surveyed said that risk managers should provide strategic risk input to the planning process. But only 20% of C-suite executives and 15% of risk professionals said the latter are full members of strategic planning or execution teams at their companies. But the two experts believe there is an opportunity today for risk managers to become more integrated in the strategic process. Ms Fox noted, for example, that almost 74% of the executives said their companies do not include the capacity for bearing risks as a measure of risk appetite. This is the kind of information that could prove essential for a company to fulfil its strategic goals, she stressed. Ms Fox said that there is the need for C-suite executives to listen more closely to risk managers. This creates an opportunity for risk professionals that can be seized by talking about business issues and not about the risks, she pointed out. Ms Connor added that to be more involved in strategic planning, risk professionals have to understand how they can help the company grow, how they can add value to the company and how their company makes profit. "It is much more fun to talk about how to achieve goals than to talk only about the downside," Ms Fox said.

Time for teamwork – North America, Part II

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