Saturday, February 6, 2010
Thoughts on Risking the Enterprise by Cavanaugh - Earl Malvar
Enterprise Risk Management, if to prove successful for an organization’s sake, must encompass and permeate through a company’s culture. As what was mentioned in the article, the big Wall Street names that tanked amid the mounting pressure during the financial crisis were not short of documentation and conceptual design on risk management systems, but they were lacking in execution. Risk management, especially in the insurance industry, can be tricky because risk factors can sometimes be unquantifiable. The very nature of risk as an unanticipated loss or liability further highlights the need for a firm’s workforce to understand and practice ERM. Risk management, though a relatively new function in organizations, has now been given greater attention by higher management after the debacle of 2008. It may still have a long way to go though before uniformity and formalities are established as different industries and companies possess unique attributes and business needs that make effective Enterprise Risk Management elusive to practitioners.