Survive &Prosper in Economic Turmoil by Enterprise Risk Management

Risk and Insurance Management Society believes that the financial crisis is a call to action for enterprise risk management to demonstrate its value. It requires practitioners to exhibit the personal characteristics referenced earlier leadership, ethical decision making and a strategic point of view. But it also requires acertain degree of courage in cases where a company's culture is not yet ready to embrace ERM fully. Ultimately, when we look fora cause of the current financial crisis, it is critical to remember that organizations failed to do a number of things:

a) Truly adopt an enterprise risk management culture

b) Embrace and demonstrate appropriate enterprise risk management behaviors, or attributes

c) Develop and reward internal risk management competencies, and

d) Use enterprise risk management to inform management decision-making in both taking and avoiding risks.

Enterprise risk managementto be effective must fundamentally change the way organizations think about risk. When enterprise risk management becomes part of the DNA of a company's culture, the warning signs ofa market gone astray cannot go unseen so easily. When every employee is part ofa larger risk management process, companies can be much more resilient in the face of risks. It is an important lesson to learn now, before the cycle renews itself and businesses find themselves facing then extcycle of business failures, lapses in risk management and short coming sing overnance. The cycle does not have to repeat itself as it always has in the past. Enterprise risk management is an important key to preventing it. Enterprise risk management, when designed and implemented comprehensively and systemically, can change future outcomes.

When it is practiced fully, enterprise risk management does not just help protect businesses from setbacks, it enables better overall business performance. With that in mind, and with so much economic uncertainty on the horizon, now is the perfect opportunity for organizations to use the many strengths ofa solid enterprise risk management program to their advantage. Moreover, the Risk and Insurance Management Society, as a leading advocate of enterprise risk management, is uniquely positioned to help drive leadership competencies in enterprise risk management.