As organizations begin to rethink their approach to risk management, they often struggle to pinpoint who should lead the process. Often they fail to identify individuals who will position the process from a strategic lens. As a result, their ERM processes are relegated to compliance focused, loss-prevention activities with minimal connection to strategy development and execution. What’s missing is the connection of risk and strategy. That creates a huge opportunity for an executive to assume leadership of the ERM process who is able to position ERM from a value-adding, strategic position.
Strategic Risk Leader
In a recent article in the Journal of Accountancy, Bonnie Hancock and Mark Beasley layout an approach an executive can take to position ERM from a strategic lens perspective. While they position their arguments from the perspective of a CFO-type position, the points they make are applicable to any executive who seeks to provide strategic leadership to the organization’s risk oversight approach so that ERM provides a rich contribution to the achievement of business objectives.
Take Hold of the Strategic Risk Leadership Opportunity
Organizations are struggling to connect ERM and strategy. This represents a huge opportunity for a member of the executive team to grab hold of the process to ensure ERM is about driving strategic value. The article lays out key considerations on how to lead ERM from a strategic perspective.
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