Enterprise Risk Management (ERM) is increasingly important for organisations of all sizes. We live in an age of change, ambiguity and uncertainty which requires that more than ever, risks to the achievement of objectives must be forefront in the minds of everyone, from the boardroom to front line staff.
ERM enables an organisation to consider the potential impact of all types of risks in relation to strategy, processes, people, systems, activities, stakeholders, products and services.
Implementing a comprehensive approach to ERM will result in an organisation reducing the downside of risk and benefiting from the ‘upside of risk’.
Why ERM is not properly understood
ERM in reality encompasses many categories of risk, many of which have specific legal or regulatory requirements that must be applied.
A board for example, can misunderstand the risks associated with an investment opportunity which results in a financial loss of millions of dollars. Provided they acted in good faith and within the law, the worst that might happen is reputational damage and possibly losing their positions.
At the other end of the spectrum is a fatality in the workplace or significant damage to the environment. If the board cannot prove they have applied the specific requirements applicable to the management of safety and environmental risk, they could face court and a prison term.
While in certain circumstances it is a good strategy to accept risk as part of a risk and reward proposition, in other circumstances adopting that approach would draw serious attention from regulators.
Options also exist to adopt strategies to transfer risk from time to time, but at other times, no matter how much you would like to transfer risk, laws, regulations and contracts specifically prevent any risk transfer.
This is why we say that a proper understanding of ERM is required to ensure that not only do you manage and control risk within your organisations risk appetite and tolerances, but that you also meet your legal and regulatory obligations and have a defensible position in the event particular risk events occur.
What questions should be asked?
Accountable people in organisations including directors, executives, general managers and those in specific roles should be asking themselves:
- Are we engaging in ERM or just risk management?
- Are we applying the right approach to the right categories of risk?
- What role is ethics playing in our risk management approach?
- How embedded is risk in our organisational culture and decision making?
- Am I confident that my organisation has met its obligations across all categories of risk?
ERM done well – driving value in every business
The outputs from successful risk management include compliance, assurance and enhanced decision-making. These outputs will provide benefits by way of improvements in operational efficiency and effectiveness, change management, business resilience and the strategy of the organisation.
Only through assured risk management can organisations take advantage of the Risk / Reward proposition.
A properly implemented ‘Three lines of Defence’ approach is key to embedding risk management into the psyche of an organisation.
i3 Australia is continually looking to challenge conventional thinking about risk management.
Risks can only be successfully dialled up to achieve higher returns if an organisation’s risk management is mature and embedded at every level of the business.
Contact us to discuss how ERM properly implemented in your organisation can be a key driver of performance and help support innovation, growth and sustainability.
Our Experience Counts When it Comes To Risk Management in Queensland
If you need assistance with risk management in Queensland, i3 Australia, should be at the top of your contact list. Now more than ever, businesses should ensure that they have a comprehensive risk management strategy firmly in place. The global economy has recently been severely affected by unforeseen events, which will naturally have a knock-on effect for most other economies.
We can help your company to develop and implement a comprehensive approach to enterprise risk management, which could aid in minimising the negative aspects of risk and taking advantage of the positive.
The Importance of Business Continuity in Queensland
Without business continuity strategies, your business would struggle to maintain momentum consistently. We can assist with strategies to maximise efficiency and productivity, allowing your business to continue on its upward trajectory.
- Your business must be able to continue operating despite any obstacles or issues that you may come across, which is why a business continuity strategy is critical.
- When you require financial consulting in Queensland, our experienced consultants are on hand to assist with all aspects of your company’s financial requirements. The advice we offer is insightful, and we focused on improvement intently.
- We aim to ensure that your business is as resilient as possible, to weather the storms of an unpredictable future.
Tips Regarding Business Survival in Queensland
Any business needs to be profitable and be able to grow to survive. Business recovery in Queensland need not be the nightmare you are expecting when you contact us to consult and assist with each step for your business to survive:
- Keep costs as low as possible. Easier said than done in today’s cutthroat markets, but we can assist with all aspects of cost-savings.
- Provide excellent customer service for you to retain as many existing customers as possible and try to recruit new customers.
- Pay close attention to your cash flow. It is unwise to overextend your finances at the best of times.
About The Professionals at i3 Australia
After meeting at the University of Queensland while completing our MBAs, we formed i3 Australia in 2015, as a boutique consulting firm, based in Brisbane.
David MacDonald is a highly qualified partner who is responsible for our business improvement service line as governance, risk and performance professional. He is passionate about innovation and helping clients to succeed in an ever-changing environment.
Sharon MacDonald excels in finance and data analytics and is responsible for leading several financial improvement projects. Clients have experienced improved financial performance with her professional assistance in the form of digitisation, data analytics and advanced financial reporting.
Andrew Roberts is an experienced practitioner who is responsible for our people and culture service line, while Peter J Rees is our head of creative and takes the lead when it comes to digital media and marketing service.
Please do feel free to get in touch with us to see how we can provide insight into, innovate and improve your business today.
You don't have to believe in coincidences because they happen every day. The trick is to be able to discern when something is more than coincidence."