Dave Ingram’s what ERM is and is not

I like Dave Ingram sees as ERM

  • An approach to assure the firm is attending to all risks;
  • A set of expectations among management, shareholders, and the board about which risks the firm will and will not take;
  • A set of methods for avoiding situations that might result in losses that would be outside the firm’s tolerance;
  • A method to shift focus from “cost/benefit” to “risk/reward”;
  • A way to help fulfill a fundamental responsibility of a company’s board and senior management;
  • A toolkit for trimming excess risks and a system for intelligently selecting which risks need trimming; and
  • A language for communicating the firm’s efforts to maintain a manageable risk profile.

I like what Dave Ingram sees as ERM is NOT:

  • A method to eliminate all risks;
  • A guarantee that the firm will avoid losses;
  • A crammed-together collection of longstanding and disparate practices;
  • A rigid set of rules that must be followed under all circumstances;
  • Limited to compliance and disclosure requirements;
  • A replacement for internal controls of fraud and malfeasance;
  • Exactly the same for all firms in all sectors;
  • Exactly the same from year to year; nor
  • A passing fad.

What ERM Is… and Is Not…

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