In the last decade, organizations have shifted away from a fragmented view of risk management, creating strong demand for professionals with enterprise risk management (ERM) expertise.
To implement a solid ERM framework, executives and senior managers rely on accurate, insightful information to execute necessary risk-mitigating actions.
In an increasingly complex risk environment, risk management is a top skill for finance professionals. Equipped with the skill, you can uncover risks, develop strategies and enable senior executives to make timely, strategic decisions.
The capacity to gather and evaluate data is only one driver of success in your risk management role. You must have deep financial expertise to analyze data and make insightful, proactive recommendations that address risks.
With ERM, successful organizations integrate comprehensive risk management that strengthens strategic decision-making and supports expansion goals.
The main responsibilities of ERM professionals is to tie together all aspects of risk management, to foster communication between departments, and to enable executives to make informed decisions.
Core competencies for successful risk managers include strategic and analytical thinking, strong communication, agility, and technical skills.
Think strategically to drive effective ERM
Whether you hold a risk management position, serve as an enterprise risk manager, or are interested in pursuing roles that entail risk management, you must hone your strategic and analytical thinking skills.
Effective ERM involves aligning such efforts with overall strategy and organizational KPIs and understanding how risks affect the business.
By analyzing historical data and past events, risk managers perceive patterns and understand corporate strategy as well as the organization’s current position and future direction.
The overall strategy informs the most vital activities for reaching business objectives, and risk managers ensure that critical strategic elements are properly safeguarded. Along with knowing an organization’s risk level, a risk manager verifies risk appetite, meaning how much risk the organization is willing to accept.
Assessing the likelihood and impact of risks coming to pass requires that you analyze and monitor changes in the external environment, such as regulations, industry trends, and geopolitical events. Risk mitigation will be informed by how external factors affect the organization.
Explore how you can develop the skills required to lead your organization’s risk program in A leadership guide for the risk leader.
Communicate complex risk information clearly
As a risk professional, you must share complex data-driven reports with senior management, board members and internal and external audit committees.
You need strong communication skills to collaborate across assurance groups to gather risk information and deliver higher-quality counsel to senior leaders.
Risk management must be integrated across the organization. Successful risk leaders encourage open communication to build awareness of risk and create a positive risk culture. This culture is built on transparency, where you address employees’ concerns, and the organization provides necessary training.
Agility enables leaders to handle change
The risk landscape changes constantly and requires risk leaders to be flexible.
Agility in ERM means evaluating and adapting risk management strategies to ensure they remain effective. You must anticipate and plan for challenges.
Leading ERM efforts requires continuous adaptation so management can make informed decisions in times of crisis and uncertainty, ensuring that the organization operates effectively.
Agility is an essential skill, one that is evident in those who are self-aware, take initiative and commit to constant improvement.
ERM insights for the finance risk leader is a guide for finance professionals who lead their organizations’ ERM through current and future risks.
Hone technical skills Gathering, analyzing, and interpreting large amounts of data to identify risks and assess their impact requires deep industry knowledge. It also requires technical skills. Managing risks entails knowledge of various risk assessment methodologies and risk management software that will enable you to execute risk management projects, including developing risk management plans and implementing risk mitigation strategies.Risk management professionals must also be aware of relevant regulations, standards, and laws, such as SOX and ISO 31000, to ensure compliance and reduce regulatory risks.ERM is critical to successful business operations. As the regulatory landscape shifts and technology evolves, aspiring risk leaders or professionals with risk management responsibilities must understand the organization’s industry and operations and be able to develop strategies to mitigate risk. Successful risk managers have strong organizational skills to manage risks with minimal disruption. They also understand that ERM is an evolving field where you must adapt and pivot to foster a robust and proactive ERM framework. Expand your knowledge and understanding of ERM and learn more through the COSO Enterprise Risk Management Certificate Program, where you will find the concepts and principles of the newly updated ERM framework.