Now there’s a sentence I have heard many, many times! I believe this assumption comes from the association that risk management equals management of compliance risks, which applies mostly to regulated companies or public companies.
As we’ve already discussed many times in these blogs, this is a misconception – compliance risks only compose one risk category that deserves to be managed. It certainly doesn’t define a complete risk management scope.
All companies manage risks since they’re inherent to any production or service delivery activity. For instance, small and medium enterprises (SMEs) might manage:
Treasury risks: suppliers and employees aren’t …
Whenever I talk to customers that decide to embark on a risk management project, and wherever they are in the world, one question always kick starts the conversation: So, where do I start?
As a matter of fact, when writing this post, I was kicking myself: Why didn’t I start my blog postings with this topic first? I should have indeed, and I do apologize that it comes so late. It seems that we all want to see the results of a project and invite people to the house warming party before we even lay its foundations…
For all risk …
I was sitting in my backyard yesterday, which overlooks a golf course in Anthem, Arizona, and my mind was wandering as I thought about the topic for my next blog. Just for the fun of it, I thought about some key aspects of golf that might be applicable to governance, risk, and compliance. If you are a golfer, you’ve probably heard some of this before—but I’m guessing you’ve never heard this applied to GRC.
Perhaps the US Golf Association (USGA) says it best in an excerpt from The Human Element:
“Golf is …
My Fictional Day Begins…. By Carla
After I drag myself out of bed and finish my morning ablutions, I sit down with coffee and cereal to read the latest Federal Register followed by Compliance Today and a few industry publications. I make notes as I go of any regulation changes relevant to my job. You see, the company is extremely interested in avoiding compliance risk—and to be honest, it makes my work life miserable.
Oh, pardon me, I should introduce myself. I am Carla Franco, a working manager of a purchasing team within a large global enterprise. I can’t …
Who’s responsible for ensuring that corrective actions to remedy issues identified by internal audit are completed?
Management is responsible for the system of internal control as well as for managing risk.Management is responsible for correcting deficiencies either in controls or in the management of risk, whoever identified them.
So why does internal audit, more often than not, monitor completion of these actions? Why should they be the ones that report progress to the audit committee and executive management?
Internal audit certainly has an interest in seeing these actions taken. Not only does it mean that their recommendations for change …
It seems that almost every day I read blogs or articles in professional journals lamenting the fact that business executives aren’t supporting risk management initiatives in their business or not consuming the reports and conclusions of their risk management professionals.
In addition, we see evidence regularly in the press that risk management is failing and that catastrophic and harmful losses persist. There’s a reason for this. Risk management practices embrace beliefs and methodologies that create apparently” profound reports—but instead it’s ponderous and essentially useless information. It results in inert, albeit attention grabbing, charts and graphs.
I call them dead …
Please select the best answer:
1. A flight attendant in a commercial airliner notices smoke coming from the stove in the rear galley. He is trained to:
a. Immediately contact the pilot and report a “material weakness” in the smoke detection system.
b. Immediately contact the pilot and report smoke coming from the stove in the galley.
2. You are awoken in your home in the middle of the night by the sound of intruders. You should:
a. Immediately call the police and report a “key risk indicator.”
b. Immediately …
A Better Way to Classify Risks
There’s nothing new about classifying risks by category – strategic risk, operational risk, and so on. But I’m suggesting the strategy for managing risks is dramatically different for each section of the quadrant. And we make mistakes when we use a response strategy that doesn’t match the risk type.
In my previous blogs, I illustrated the GRC Strategy Quadrant, which classifies risks based on the risk “appetite” of the business and the perceived risk level, and I explained
Time and again I hear that risk management is seen as something that is required by the regulators, perhaps by the board or top management, but is not seen as something that helps individual managers succeed.
Time and again I hear that boards are not receiving the information they need to know whether the risks to the organization’s strategies are managed appropriately.
Time and again I hear of organizations that are satisfied (i.e., complacent) with the periodic management of a list of significant risks — as if risks are somehow less dynamic than the business environment.
Time and again I …
A Better Way to Classify Risks
There’s nothing new about classifying risks by category – strategic risk, operational risk, and so on. But I’m suggesting the strategy for managing risks is dramatically different for each quadrant. And we make mistakes when we use a response strategy that doesn’t match the risk type.
In my previous blogs, I illustrated the GRC Strategy Quadrant, which classifies risks based on the risk “appetite” of the business and the perceived risk level, and I explained Type A and