The Importance of Board Support for Enterprise Risk Management: Part 3
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 Discussion Points:
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Role of Internal Audit in Risk Oversight:
- The audit committee at Duke University is explicitly tasked with owning the risk management process, as written in its charter.
- Mike Somich facilitates strategic risk identification and presentation, collaborating with senior leadership across operational, financial, and IT domains.
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Integration of Risk Oversight and Audit Planning:
- Duke’s internal audit plan is driven by the university’s comprehensive risk assessments, covering operating, financial, and strategic risks.
- By 2011, all aspects of the risk management process were in place, influencing the 2012 audit plan to align with identified risks.
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Advice to Internal Audit Professionals:
- Somich advocates for internal audit departments to take on a leadership and facilitation role in risk oversight.
- Highlighted the intersection of risk, compliance, and controls as critical to creating value and effectiveness in the internal audit function.
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Resources for Boards and Audit Committees:
- Beasley points to resources available on the ERM Initiative website, which include articles on board and audit committee dynamics to support enterprise risk management.
Conclusion:
The dialogue emphasizes the value of internal audits in driving risk-informed strategies and underscores the importance of collaboration between audit committees and leadership. Internal audit professionals are encouraged to engage actively in risk oversight processes to enhance organizational effectiveness.
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
