In today's rapidly evolving business landscape, organizations face a multitude of risks that can jeopardize their success. To effectively navigate these risks, financial institutions turn to Enterprise Risk Management (ERM) programs. However, it's important to recognize that instilling an ERM program is not merely about implementing platforms, models, or frameworks. It goes far beyond that – it requires a fundamental shift in organizational culture. This post highlights common themes from speaking with risk professionals at the 2023 CefPro Risk Americas Conference and explores how SRA sees a crucial role of cultural change in ERM implementation. Read below why cultivating a risk-aware culture is the foundation for successful risk management.
ERM platforms and models undoubtedly provide valuable tools for identifying, assessing, and monitoring risks. However, they are only part of the equation. These systems are most effective when supported by a culture that embraces risk awareness, accountability, and proactive risk management. Our Watchtower platform and Enterprise Risk offering not only address your reporting and monitoring needs, but also supports your efforts in a way that opens up the risk function to the larger organization to help other understand how risk and performance are two sides of the same coin.
Here at SRA, we believe that cultural change sets the stage for effective ERM implementation. It involves instilling a risk-aware mindset throughout the organization, where risk management becomes ingrained in the decision-making process at all levels. This cultural shift promotes a proactive and holistic approach to risk management, fostering a collective responsibility for identifying and addressing risks.
Your executive team plays a pivotal role in driving cultural change. By demonstrating a strong commitment to risk management and integrating it into their strategic vision, leaders can inspire and motivate employees to embrace a risk-aware culture. They should communicate the importance of risk management, provide resources for training and education, and lead by example in making informed risk-based decisions. SRA’s platform was built to break down silos, educate non-risk professionals, and raise the voice of your risk function to the level of strategic.
Not considering regulatory pressure, SRA’s Watchtower platform reinforces a risk-aware culture, where risk management must be embedded in various organizational processes and policies. This includes integrating risk assessments into strategic planning, performance evaluations, and project management. Watchtower helps our clients deliver on the best practice of making risk management a routine part of day-to-day operations. We have seen our clients employees become more attuned to potential risks and better equipped to respond effectively.
Creating awareness and engaging employees in the ERM journey are critical for success and probably the most difficult. Training programs, workshops, and regular communication channels can help employees understand the importance of risk management, their roles in mitigating risks, and the potential benefits of a risk-aware culture; however, having a strategic partner to help you navigate this road is critical for success. Here at SRA, we encourage open dialogue and rewarding proactive risk management behavior to help our clients spread engagement and ownership across all areas of the organization.
ERM is not a one-time implementation; it is an ongoing process of continuous improvement. SRA encourages and helps support a learning culture where feedback, lessons learned, and evolving best practices are shared across the organization. Our program helps you adapt to new risks, stay updated on industry trends, and continually refine your risk management approaches resulting in your enhanced resilience and adaptability.
In an increasingly complex and uncertain business environment, a robust ERM program is crucial for sustained success. However, it is important to recognize that ERM implementation goes beyond technological solutions and frameworks. It necessitates a cultural shift that instills risk awareness, accountability, and proactive risk management throughout the organization. By delivering a robust ERM platform that supports cultural change, organizations like yours can build a solid foundation for ERM, to empower all employees to identify, evaluate, and respond to risks effectively.
Remember, true risk management success lies in the collective efforts of a risk-aware culture, supported by the right platforms, models, and most importantly, partner.