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ERM Best Practices<br />Adapted from content by: McKinsey and Co.<br />
Denial<br />Head in the sand approach<br />Fear of bad news<br />Over confidence<br />Detachment<br />Slow response/Reactive approach<br />Indifference<br />Ambiguity<br />Poor definition<br />Lack of clearly documented processes<br />Lack of insight<br />Lack of communication<br />Avoidance<br />Seeking loopholes for subversion of Risk<br />Flaws in Risk Culture<br />Adapted from content by: McKinsey and Co.<br />
An integrated framework helps<br />RISK: Risk Identification, Risk assessment, Risk monitoring, Risk mitigation , Risk profile development, Board driven Risk Appetite, Risk dashboards and Heat Maps<br />PROCESS: Process analysis, process improvement techniques using Six Sigma methodologies to drive operational efficiencies such as cycle time reduction and headcount redirection/reduction<br />COMPLIANCE: Controls documentation and Lifecycle Management to meet Regulatory requirements, with the objective of minimizing the probability of audit findings and financial penalties<br />
Risk Tree and Heat Map<br />R2<br />R1<br />R3<br />The highest Risks on a Risk Tree are represented on the Heat Map<br />
Leveraging ERM in Process and Compliance Management<br /><ul><li>Overlay and align the Risk Heat Map with the Strategic Elements dashboard
Ensure alignment between Risk Evaluation and Prioritization, and the Strategic Plan