KPMG: 10 Common ERM Challenges

Risk Management magazine just published an article by Jim Negus (of KPMG LLP’s risk and compliance services group) listing their top ten ERM challenges. They write:

Very few organizations find enterprise risk management implementation easy–it requires a rare combination of organizational consensus, strong executive management and an appreciation for various program sensitivities. Despite the effort required, however, ERM is worth it because it forces most organizations to step back and identify their risks, which is one of the first steps to protecting capital and driving shareholder value. As boards and executive management evaluate ERM, however, they usually come away with more questions than answers. While each company faces specific concerns, the more challenging ERM issues are generally consistent across companies and are largely unrelated to industry, geography, regulation or competitive landscapes. By examining some of these common ERM challenges, as well as the creative solutions that have been applied by other organizations, management will be better equipped to develop and revamp their own enterprise risk management programs.

Top 10 listed are listed below but to read the entire article, click here:

1. Assessing ERM’s Value

2. Privilege

3. Defining Risk

4. Risk Assessment Method

5. Qualitative Versus Quantitative

6. Time Horizon

7. Multiple Potential Scenarios

8. ERM Ownership

9. Risk Reporting

10. Simulations and Stress Tests

Riskczar says: When you really think about it, this list is like the Table of Contents of every ERM framework.

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