• Summary

  • We see a striking contradiction in all businesses: the sharply increasing need for Enterprise Risk Management, as opposed to risk managers' persistent reports of low perceived value of their own processes. Correctly implemented, High Quality Risk Assessment will not only address uncertainty, but even solve chronic business problems. Join Edward Robertson, successful ERM practitioner and thought leader, to discover a simple process that delivers clear value.
    © Edward Robertson 2021
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Episodes
  • Oct 12 2021

    SHOW NOTES 

    Introduction
    The key questions entertained at the level of the C-suite with regard to ERM are likely these three, to which I give an answer in summary:

    a. What exactly is ERM?

    Due to uneven development in the field, the definition has to be selected from among many, or created. I offer a carefully crafted definition.

    b. Is there a verifiable value proposition?

    Yes. An incremental, low-risk and trial implementation will yield results, successively:
    (1) with respect to clarity of the strategic identity and aims; 
    (2) by supporting execution on goals and objectives; 
    (3) by analyzing and solving business problems.

    c. How can it be integrated, quickly and efficiently, with existing planning and management?

    By:
    (1) establishing sound planning, and 
    (2) using the principles of successful program implementation.

    An elaboration on these answers is given over the course of the podcast series. 

    Main points

    1. Enterprise Risk Management essentially comes from the worldview of rational planning.

     

    2. Preparedness in the form of Business Continuity and Emergency Planning can be considered the cornerstone of an ERM program.

    3. ERM has developed in such a way that there is a multiplicity of definitions. 

    4. The planning regime itself is all-important. 

    5. Survey results show little confidence in the quality and utility of the results of risk assessment.


    6. This leads us to value, as the core practice in ERM, what I call High Quality Risk Assessment. 

    7. The second main pillar of a successful program is to be acutely aware of a body of knowledge addressing generic program success. This seems to be little-appreciated in the management world.

    8. The titles and job descriptions of those managing risk is varied. 

    9. Managers responsible for ERM often have trouble with conceptual hurdles. 

    10. The use of scenario analysis: a. for specific circumstances; b. for future resilience.

    11. Risk managers: strive to define your aims, and quickly prove the value of Enterprise Risk Management as a practice which brings scrutiny to the uncertainty inherent in plans.


    Thank you for your attention. Anyone wanting support materials can go to riskcommentary.com. 

    KEY QUOTE

    ”Enterprise Risk Management holds the promise of capturing the entire spectrum of risk across the organization. This book answers the need for a generic ERM methodology, proven by experience in the field, in both public and private sectors.” (Robertson 2016 back cover)

    LINKS
    (E. Robertson 2016) Solving the Enterprise Risk Management Puzzle: Secrets to Successful Implementation 

    BOOKS, COURSES, and CONSULTING CONTACT

    RiskCommentary.com

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    14 mins
  • Oct 6 2021


    SHOW NOTES 


    Introduction

    Opportunity, as conceived of in ERM discourse, is discussed. Then we improve upon this by presenting the notion of a structured program for innovation. 

    Main points
    1. Opportunity - origin of the idea in ERM
    2. Opportunity - how can we make sense of the idea?
    3. Opportunity - as innovation
    4. Innovation
      a. an established discipline
      b. within the grasp of the risk manager; an expanded role
    5. Innovation - Free Online Introductory Course 
    6. Innovation - Paid Course 
    7. Innovation for Risk Managers - accredited course through RIMS

    Summary

    1. Opportunity is yet another term form the world of finance that requires interpretation for meaningful application in Enterprise Risk Management.

    2. Managing opportunity must, in the end, resolve to a structured search and development; i.e., innovation.

    3. Innovation courses Edward has online: 

    - one free introductory; 

    - a second, paid and in-dept

    - a third, accredited for RIMS Fellow designation, by Riosk & Insurance Management Society, New York.

    KEY QUOTE

    ”...risk managers can borrow from the practice of innovation and use a structured method to seek out, evaluate, greenhouse and develop new ideas” (Robertson 2016 p.112)


    LINKS 

    (E. Robertson 2016) Solving the Enterprise Risk Management Puzzle: Secrets to Successful Implementation 

    Technology implementation - 3-part discussion, LinkedIn audio posts

    innovation - successful tech implementation

    COURSES
    Innovation - free introductory course
    Innovation - paid course
    Innovation for Risk Managers - accredited course

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    15 mins
  • Sep 28 2021

    SHOW NOTES

    Introduction
    Due Diligence (defined) and High Quality Risk Assessment: how are they used in a complementary fashion in major projects?

    Main points
    1. Reflections on financial risk management (Ep 17): quote from L. Burke Files.
    2. Definition of due diligence.
    3. How due diligence is distinct from yet complementary to risk assessment: order of operations.
    3. a. Due diligence in major investment projects: example of detailed schema using a maturity matrix:
    - review of firm|  
    - management team
    - business model
    - deal structure

    3. b. What are the risks evident in the above due diligence exercise?

    The old adage is “high returns = high risk”. Is it strictly accurate?
    Example: An investment structure and management team with a relatively low risk profile may have significant returns designed into the product. 
    Conversely, a low-ROI product may be subject to uncontrollable conditions, or have sub-standard management, and thus carry high risk. 

    With this methodology, risk takes on a comprehensive and properly differentiated character. We want separate views of: 
    - level of maturity of the firm, management team, business model and deal structure; 
    - the anticipated returns (due to the nature of the investment); and 
    - the risk profile affecting execution.

    4. Application of Due Diligence and High Quality Risk Assessment in stages of major projects:
     - review of strategic options; procurement process; financing methods - use combination of methods
     - review of major stages (feasibility; approvals; construction phases; commissioning) - risk assessment

    Summary
    1. Due diligence has to do with checking against pre-set authoritative criteria; risk assessment has to do with investigating the uncertainty associated with plans to execute goals and objectives.
    2. The two are complementary methods that help you take your analysis of candidate projects beyond the single dimension of a probability estimate of success (assuming you even have a relevant Risk Rating database).
    3. Use criteria arranged in levels of accomplishment to assign a maturity score in one or another aspect.
    4. We used the categories of firm, management team, business model and deal structure in a sample due diligence system. You can create the system that is relevant to your business.
    5. Check your project management methods to ensure you are using due diligence, as applicable, and risk assessment at all phases of major projects. The risk register helps you not only design contract clauses but also guide the ongoing management.

    KEY QUOTE
    “The practice of due diligence has evolved into SOX checklists... Best practice awards are given to the weightiest presentations (by the pound) and third part vendors are predominantly selling ‘perfect solutions’ for enterprise risk management that will seriously impede your ability to conduct business.” (L. Burke Files, Due Diligence for the Financial Professional, 2010, p.6)

    LINKS 
    Robertson, E. Enterprise Risk Management Tools and Templates, 2016. p. 35 - Enterprise Risk Management maturity matrix, based on Carnegie-Mellon methodology.

    Mark C. Paulk, Bill Curtis (CAST Research Labs), Mary Beth Chrissis, Charlie Weber Capability Maturity Model for Software (Version 1.1) 
    The original article whose methodology has been borrowed and applied to many aspects of business.

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    20 mins

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