Hungry for Collaboration
Fresh from another great RIMS in San Diego, I want to report on some of the great work that the RIMS Enterprise Risk Management Committee did in the past year and is planning for the future.
Also, I want to encourage readers to volunteer for RIMS or other professional groups. Though my time is stretched to the max, I find that the reward of working with others towards a common goal without any compensation or promise of reward is a pretty cool and liberating environment to work in.
Risk knowledge with an actionable outcome is powerful.
You don’t have the restrictions that can come with your job or work environment and you can really stretch your thinking and be innovative.
Take the RIMS ERM committee’s recent work on risk appetite and tolerance statements and actions: The Steps to Successful Risk Taking: Developing Effective Risk Appetite and Tolerance Statements
We were feeling pretty hungry … hungry for a risk appetite and tolerance framework that could provide a holistic view and process to manage a company’s willingness and ability to take risk, and encourage better corporate governance, and help management make better strategic decisions.
We put together examples of how different organizations are using risk appetite and tolerance as well as a Risk Appetite Tolerance & Action Index that we intend to keep adding to and revising.
The added element of actions tied to risk appetite and tolerance provide the accountability that is needed to make the effort of enterprise risk management really valuable. Risk knowledge with an actionable outcome is powerful.
So if you’re hungry too….and if you are a member of RIMS, you can contribute to the Index on OPIS.
Both the ERM Committee and Strategic Risk Management Committee met at the conference and while there were a number of items for discussion, the subject of the consideration of risk and engagement of the risk manager in mergers and acquisitions (M&A) got some great energy going.
Risk managers are often brought in late to the M&A game and once engaged the focus is often on insurance, which — while important — may not be the critical pain point. So is the “problem” we should solve getting the risk managers engaged earlier? And if so, what work would the ERM and SRM members need to do to influence that?
Maybe decision-making on growing and increasing shareholder value should be the chief area of concern, not the timing of the engagement of the risk manager.
But growth does not always have to come from acquisition. There needs to be adequate consideration of risk versus opportunity in the development of the growth strategy.
Maybe the problem is that the risk managers are not part of developing the due diligence framework in the M&A process. Trying to figure out what problem we are trying to solve is a great place to start a dialogue, versus thinking there is a ready-made solution.
I’m very lucky to get to volunteer with these very smart people, and I can’t wait to see what we develop on improving the consideration of risk, this time with the focus on M&A.