The Importance of Board Support for Enterprise Risk Management: Part 2
A critical element for the success of any ERM effort is the involvement and “buy-in” of the board of directors. Michael Somich, Executive Director of Internal Audit at Duke University, discusses the involvement of the board at Duke and how they have bought into the ERM process and how they see the value it brings to the table when discussing risks on a macro-level.
Key points include:
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Senior Leadership Engagement: Somich highlights the strong involvement of senior leadership at Duke in the risk management process. The university president actively supports the initiative, setting the tone for its importance by addressing leadership teams and endorsing the process.
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Somich’s Role: As the visible facilitator of the risk management process, Somich collaborates with various teams to identify, mitigate, and communicate risks across the organization, though he does not own the risks himself.
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Regular Communication: Somich meets regularly with the university president to align on risk management goals, ensuring ongoing engagement and updates. Interaction frequency varies but includes at least quarterly updates on operational, financial, and compliance risks.
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Broader Organizational Involvement: Risk management has been extended to all organizational levels, including academic risks. For example, deans of schools were tasked with creating heat maps for their risks, guided by communication and support from the provost.
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Critical Role of Leadership Support: Somich emphasizes that effective enterprise risk management (ERM) cannot succeed without the active support of top leadership, such as the president or CEO. Their involvement sets the tone and ensures broader organizational buy-in.
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Resources for ERM: Beasley concludes by encouraging viewers to explore ERM resources available on NC State’s ERM Initiative website, particularly those addressing board and audit committee dynamics.
This dialogue underscores the importance of top-level support, consistent communication, and structured processes in implementing successful enterprise risk management.
Original Article Source: “Transcript of Interview with Mike Somich on the Importance of Board Support for Enterprise Risk Management Parts 1-3“, Michael Somich and Mark Beasley, 2012
