There have been many discussions around the value of enterprise risk management as of late. Some individuals may feel as if having a risk manager on board checks the box, meeting the company’s obligations. Others may feel that enterprise risk management is the start and end to all their challenges and, if things do not work out as expected, the risk manager is to blame. So where does that leave the risk manager?
In order to have a healthy enterprise risk management program, risk managers should think like salespeople.
Risk management professionals tend to be very passionate about their vocation, but not everyone may be buying into the ERM process. The first step to selling your risk program is to find a champion.
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This person should be on your executive team—preferably the CEO. You need a strong voice in your organization that will support the change that an enterprise risk management program can bring. It is also a good idea to have support from the board of directors and, if applicable, the internal auditor. When building your risk team, keep in mind that the end goal is to have all employees of the organization support and apply risk management to their day-to-day challenges. The more risk champions you can find, the better your program will be advocated and supported.
Once you have completed your public relations campaign by finding your risk champion, the next step is finding a common language everyone can understand. It is particularly helpful to ensure that the risk terminology used within your organization is consistent and understood.
Once people begin to speak the same language, conversations should begin to flow.
The third step is to make sure you have a sound product. Building a comprehensive risk framework and process that fits your culture is a valuable selling point. There are many frameworks to choose from such as the Australian model, COBIT and COSO. One size does not always fit all, however.
Use the components from the models that best suit the culture of your company. Be sure that you gain approval from both the executive team and your board when you introduce your framework and process.
Finally, it is time to make the sale. Have a risk workshop with your executive, but be sure to come prepared. It is critical to have a thorough understanding of the company’s strategic objectives, as the risks identified through your process should align with the company’s overall goals.
Conducting risk scenarios can also help sell ERM, further embedding risk management practices into the organization. Creating a scenario that requires the application of the risk management process really helps bring the theory to life. It also allows the participants to learn together as they work together, building knowledge while strengthening the program and its support throughout the company.