Enterprise Risk Management

In today’s world of evolving technologies and businesses, financial organizations are taking on increasing levels of risk. This initiative has increased the need to employ appropriate Enterprise Risk Management (ERM) strategies, policies, and processes in order to identify, monitor, and manage risk at the proper levels. In a world of do more at a faster pace, it is important for companies to manage their activities in a manner that can allow them to align risk strategies with overall risk management and internal control activities. Inability to do this may put the company at risk for not being able to meet strategic objectives. The topic of Enterprise Risk Management continues to be an important element for organizations to successfully manage risk. Yet many organizations still approach the effort as a siloed set of processes instead of as an integrated part of business operations. This can render the program ineffective.

Topics covered in this session

• Definition of ERM
• Spectrum of ERM risks
• Credit risk
• Market risk
• Liquidity risk
• Operational risk
• Legal risk
• Reputational risk
• Strategic risk
• Regulatory expectations for financial organizations’ ERM
• Balanced risk-taking incentives
• Compatibility with effective controls and risk management
• Strong corporate governance
• Key steps to ERM implementation and maintenance
• The tone of the organization including risk management philosophy and appetite
• Objectives must be in place before management can determine the events that may impact achievement
• Identify events distinguishing between risks and opportunities
• Analyze risks considering likelihood and impact on an ongoing basis
• Select a risk response – avoid, accept, reduce or share risk
• Implement policies and procedures to ensure the risk response is carried out
• Information is captured and communicated in a timely fashion up, down and across the bank
• The entire entity is monitored and modifications made as required
• Risk management hierarchy
• It starts at the top