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Risk Management Insights

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27/10/2015 / Enterprise Risk Management, Risk Culture, Risk Management

The Road to Enterprise Risk Management Maturity

FOUR things to carefully consider during your journey to ERM maturity

The yellow brick road led to the Emerald City. The enterprise risk management (ERM) Emerald City is the risk management maturity we are all looking for, but most of us do not know where it is exactly and even what it looks like. We do, however, have an idea.  In a number of five step maturity models, the 5th and final stage is often called “Optimised”. What does this look like?

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21/10/2015 / Enterprise Risk Management, Risk Culture, Risk Management

How to Achieve your Risk Management Goals

TEN KEYS to Risk Management Success 

Having worked with many clients over the years in implementing, maintaining and developing their risk management systems you learn what works and, on the other hand, what does not.

The following are my top TEN KEYS to success – get these right and you will have a risk management function that is seen as critical as any other management function in the value it adds.

1. Keep it Simple

With any developing discipline, there is a tendency to invent new words and use big words that sound smart but no one understands. Risk management is no exception with a myriad of fancy words and acronyms. 

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13/10/2015 / Enterprise Risk Management, Risk Management, risk maturity

The 7 key ingredients for successfully transforming and maturing your ERM

Maturity is “the state or quality of being fully grown or developed.” 

Transformation means “a marked change, as in appearance or character, usually for the better”. When we apply this to Enterprise Risk Management (ERM) within an organisation, it requires some refinement.  We would suggest “transforming your risk management through maturity” means to “develop your risk management towards being fully grown by making a marked change for the better in both appearance and character”.

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07/10/2015 / Enterprise Risk Management, Risk Management, Risk and Control Self Assessment, Operational Risk

Need Help Defining Controls?

6 Key Questions to Define Risk Management Controls.

In last week's blog, I discussed the basic but often confused issue, of describing operational risks in a logical and understandable way. This week, I turn to controls, which are often as equally poorly defined and understood.

The ISO 31000 standard defines control as a “measure that is modifying risk”. While not incorrect, this definition is broad, and I am not sure overly meaningful or engaging with the employee at the coal face. 

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30/09/2015 / Enterprise Risk Management, Risk Management, Operational Risk

Need Help Defining Operational Risk?

Defining Operational Risk is not as easy as it looks 

One of the most basic steps in any risk management process is to define your operational risks.  Risks are typically recorded in a risk register together with their related controls (a topic to be covered in a later blog). This sounds easy but for any of you that have reviewed a range of risk registers or attempted it yourselves, you might have found that it is, in fact, a complex task.

The two main issues to consider are:

  1. What exactly are you describing? Your risk description needs to be consistent between all risks.
  2. What level of granularity and detail should the risk description contain?
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22/05/2015 / Risk Culture, Risk Management, Commercial Credit Risk Management

Business Intelligence for Commercial Credit Risk Management

Good practice in credit risk management is to turn periodic core banking data (eg. portfolio balance vs arrears) into meaningful information for ongoing portfolio monitoring and loan loss analysis. The process of transforming raw data into meaningful information to support business decisions is denoted by the term ‘Business Intelligence’ (BI). This can provide banks and other commercial lenders with better visibility and management of credit risk across commercial credit portfolios.

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15/05/2015 / Compliance Management, Risk Management, Performance Management

From Regulatory Compliance Risk Management to Performance Management

Changing the Value of Risk Management in the Australian Property Sector
“No risks here, leave us alone, say property industry leaders” (AFR, 27th September 2014).

While the Reserve Bank continued to express concerns about the continuing surge in demand for Australian office towers, shopping centres, industrial facilities and residential property, the leaders of the leading property sector firms downplayed potential risks to their businesses – “No risks here”.

So what has been the major risk focus of the property sector over recent years?

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29/04/2015 / Security Risk Management, Risk Management, Risk Velocity

Risk Velocity - The Third Dimension of Risk?

The primary purpose of risk management is to create and preserve value. Rather than it being a chore or a regulatory demand, risk management should be viewed as central to the organisation and its means of creating a return on capital employed.

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21/04/2015 / Compliance Management, Risk Management, Risk Auditing

Smart Risk-Based Regulatory Monitoring

 
 
 

Designing a World Class Risk-Based Regulatory Monitoring and Management System 

Risk-Based Regulation
In today's competitive business environment Regulators are being called upon to be more accountable for their performance while reducing their costs and the burden they place on businesses and the community at the same time.

In response to these growing demands the Australian National Audit Office (ANAO) published its Better Practice Guide: Administering Regulation in June 2014. Its main purpose is to help Regulators improve their performance by adopting a risk-based approach to the monitoring and management of Regulated Entities.
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27/03/2015 / Enterprise Risk Management, Risk Management

The Rise in Enterprise-Wide Risk Management Will Improve Business Performance

Currently, Australian companies exhibit varying levels of ‘risk management maturity’ ranging from:

  • organisations who have no specific risk management framework,
  • those who ‘do’ risk management due to regulatory requirements,
  • those who have embedded risk management in all aspects of business management and use risk management techniques to improve overall business performance.

In the short term (1 to 5 years), we predict there will be a significant rise in the trend towards enterprise risk management (ERM) in Australian companies and a shift in focus to performance management. Risk management is rightly being seen as an element of good management and not a discipline in its own right.

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