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Poole College of Management
Enterprise Risk Management Initiative

ERM Initiative Staff

Oct 17, 2011

Compliance, Ethics and Enterprise Risk Management

Carlo V. di Florio, the Director of Office of Compliance Inspections and Examinations at the SEC spoke about the relationship between compliance, ethics and ERM. He made his speech at the National Society of Compliance Professionals (NCSP) National Meeting in October 2011. The speech outlined the importance of ethics in compliance and ERM exercises. It also presented ten elements of effective ethics, compliance and ERM programs. The speech also emphasized the need to clarify an organization's five lines of defense namely the business, key support functions, internal audit, senior management, and the board of directors.

Aug 1, 2011

Avoiding Confirmation Bias in Decision Making

Executives today are becoming even more aware of the biases within their own mind that can prevent them from making the correct decisions. One of these major biases is confirmation bias, which is the phenomenon in which people throw away any evidence as irrelevant if it contradicts their initial notion of the situation. Increased awareness of the decision making process can help executives better evaluate situations when coming to a major decision. Confirmation bias is likely to be present in any risk identification and risk assessment task as new information comes to light that might contradict our preconceived notions about a risk event. This thought paper explores twelve questions to think through before jumping into the deep end and making a major decision with an unfounded assumption as its base.

Jul 1, 2011

Managing Social Media Risks

As organizations realize the potential of social media to positively benefit their marketing and advertising strategies, they are also aware of potential risks. In a white paper published by Crowe Howarth LLP, the authors outline sources from which social media risks can originate and provides a six-step approach that an organization can use to create an effective social media risk management strategy.

Jul 1, 2011

Managing Human Capital Risk

Though companies recognize the high impact of Human Capital Risk (HCR), many still have immature HCR management processes, if any. The Conference Board researched companies based in North America, Europe, and Asia-Pacific to evaluate current HCR management practices. Companies with Strategic Workforce Planning (SWP) indicated better HCR maturity. The research in this article also highlights a need for HR and ERM executives to engage each other more to better understand risks associated with their human capital management.

May 1, 2011

A Comprehensive Guide to Risk Appetite and Risk Tolerance

With the scarcity of useful guidance to help organizations determine risk appetite and risk tolerance, the Institute of Risk Management (IRM) is seeking to clarify and produce guidance to more effectively communicate an understanding of risk appetite. As a result, IRM released a consultation paper with detailed approaches for developing and using risk appetite and risk tolerance in risk management. In addition to the guidance provided, questions are listed throughout the document with the suggestion that they be asked in the boardroom to ensure that risk appetite and risk tolerance are being adequately addressed.

Apr 1, 2011

Homeland Security Risk Management Fundamentals

The Department of Homeland Security (DHS) plays a critical role in leading a unified effort in the management of the diverse and complex set of risks facing the United States. To strengthen capabilities in fulfilling its mission, DHS has created a Risk Management Fundamentals to provide a structured approach for the distribution and use of risk information and analysis efforts across the Department. The publication lists key principles, discusses approaches, and explains the process of effective risk management intended for DHS organizations and personnel to adopt.

Feb 1, 2011

A Survey of Global Risk Management in a Changing Environment

Explore key industry trends in risk management as financial institutions adapt to a dynamic environment post-global financial crisis. This report, based on a Deloitte survey, discusses enhancements in risk governance, increased ERM adoption, and the evolving regulatory landscape. Key topics include Basel II impacts and the management of liquidity risk.

Jan 3, 2011

Increasing Complexity Creates Challenges for Risk Management

Managing complexity is quickly becoming one of the greatest challenges for large organizations today. A white paper published by KPMG presents findings related to a study of the causes and impact of complexity affecting large companies. The pace of change and global interconnections in business have resulted in increasing complexity, creating significant risk management challenges for companies. Increased risks to manage emerged as one of the greatest challenges created by complexity, according to the study.

Jan 3, 2011

Impact of Risk Management Failures on the Financial Crisis

A report released by The Financial Crisis Inquiry Commission presents findings and conclusions related to the causes of the 2008-2010 financial and economic crisis in the United States. Failures of corporate governance and risk management at many systemically important financial institutions are among key causes of the crisis, as concluded by the Commission.

Jan 1, 2011

Assessing and Managing Risks Related to Intangible Assets

Given that intangible assets correspond to roughly 80 percent of the value of today's corporations, it is essential that companies improve risk governance practices concerning intangible assets to mitigate against the related risks. In an article from Corporate Finance Review, the authors discuss the evolution of ERM and recommend changes to the management of intangible assets as a way of enhancing enterprise value. In addition, key elements of an ideal oversight system are reviewed.