ERM Implementation
Implementing ERM processes and systems in any organization requires multiple skills and expertise. Meridian and SC&H has the expertise to assist your organization with the implementation of ERM systems and risk management processes. Though ERM has been the "Hot Topic" in recent times, the concept of managing organizational risks reaches back throughout history. Risk management tools and concepts from the Balanced Scorecard (BSC), Six Sigma, and EVA (among others) to the newly developed ERM framework by COSO, provides a level of risk identification, operational alignment, and management control not previously seen.
Common ERM Project Mistakes:
- Initiating an ERM project without fully understanding its impact and scope
- Implementing an ERM without complete buy-in from all key stakeholders
- Lack of executive level sponsorship and oversight
- Lack of follow-through on ERM beyond the initial year
- Lack of involvement or support from Internal Audit department
- Lack of ability to consistently monitor risks and report results
No matter if your organization is a Fortune 500, a small-cap, or a non-profit organization, Meridian has the solution to your ERM needs. Contact us.
ERA Assessment
If your organization is considering implementing an ERM project but unsure to where to start, consider an ERA assessment project. The ERA project will assess risks faced by your organization, the readiness of your organization to implement a risk management solution and provide the cost/benefit analysis so managers can make an informed decision.
No matter if your organization is a Fortune 500, a small-cap, or a non-profit organization, Meridian has the solution to your ERM needs. Contact us.
ERM Summary
The Committee of Sponsoring Organizations of the Treadway Commission's (COSO) developed the ERM framework as a way to address operational and financial risks in corporate governance. With the advent of corporate scandals at Enron, WorldCom, and others, a great degree of attention has been focused on corporate governance and internal control risks. However, the passage of the Sarbanes-Oxley Act only addresses the risks related to financial reporting risks. What is missing at most companies and organizations until now is access to a systematic and thorough approach to risk management.
A well-designed and implemented ERM project allows a company to address risk at all levels of decision making within the company.
- Aligning risk appetite and strategy -Management considers organization's risk appetite in evaluating strategic alternatives, setting related objectives, and developing mechanism to manage risk
- Enhancing risk response decision -ERM provides the rigor to identify and select among alternative risk responses
- Reducing operational surprises and losses -Entities gain enhanced capability to identify potential events and establish responses, reducing surprises and associated costs or losses
- Identifying and managing multiple cross-enterprise risks -Every enterprise faces a myriad of risks affecting different parts of the organization, and ERM facilitates effective response to the interrelated impacts and integrated responses to multiple risks.
- Seizing opportunities -By considering a full range of potential events, management is positioned to identify and proactively realize opportunities.
- Improving deployment of capital -Obtaining robust risk information allows management to effectively assess overall capital needs and enhance capital allocation
From Internal Auditor Magazine (April 2006)
- Failure to articulate the company's risk philosophy and appetite may result in inconsistent or incomplete risk management activities throughout the organization
- Less than 40% of U.S. executives surveyed say their companies are very effective" at identifying and managing all potentially significant risks
- Only 6% of organizations responding to a recent IIA survey indicate they have a fully-implemented ERM
- ERM's scope is much more expansive than Section 404 requirements...as an ERM requires companies to consider all objectives and activities embedded in the COSO ERM components
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