Overview
Enterprise Risk Management
(ERM) is an organization-wide approach to identifying, assessing,
managing, monitoring, and reporting risks that could affect the achievement of
strategic and operational objectives.
Unlike traditional risk management, which often manages individual risks
separately, ERM considers the interrelationships among different risks
and integrates risk management into strategy, governance,
decision-making, performance management, and organizational culture.
The fundamental objective of ERM is not to eliminate all risk. Rather, it is
to ensure that an organization understands the risks it faces, determines which
risks it is willing and able to accept, and takes appropriate action to manage
those risks.
A useful way of expressing the concept is:
ERM = Strategy + Risk Identification + Risk Assessment + Risk
Response + Monitoring + Governance
DAY 1: FOUNDATIONS OF ENTERPRISE RISK MANAGEMENT
Module
1: Introduction to Enterprise Risk Management
- Meaning and concept of enterprise risk
- Definition of risk and uncertainty
- Evolution of risk management
- Importance of ERM
- Objectives of ERM
- Traditional risk management versus ERM
- Strategic importance of ERM
- Benefits of an integrated risk-management approach
- Role of management and the board in ERM
Module
2: Enterprise Risk Management Frameworks
- ERM framework concepts
- COSO Enterprise Risk Management framework
- ISO 31000 risk-management principles
- Risk governance
- Risk-management policies
- Risk-management structures
- Three Lines Model
- Risk ownership and accountability
- Integration of risk management with organizational
strategy
Module
3: Risk Governance and Risk Culture
- Role of the Board of Directors
- Role of senior management
- Chief Risk Officer
- Risk owners
- Internal audit
- Compliance function
- Risk committees
- Risk culture
- Risk awareness
- Ethical behavior and risk management
- Accountability and escalation procedures
DAY 2: RISK IDENTIFICATION, ASSESSMENT AND RESPONSE
Module
4: Risk Identification
- Principles of risk identification
- Sources of organizational risk
- Internal and external risk factors
- Strategic risks
- Financial risks
- Operational risks
- Credit risks
- Market risks
- Liquidity risks
- Compliance and legal risks
- Technology and cybersecurity risks
- Fraud risks
- Reputational risks
- Environmental and social risks
Risk
Identification Techniques
- Brainstorming
- Interviews
- Workshops
- Checklists
- SWOT analysis
- Process mapping
- Scenario analysis
- Historical data analysis
- Risk event analysis
Module
5: Risk Assessment and Analysis
- Meaning of risk assessment
- Probability and impact
- Inherent risk
- Residual risk
- Risk velocity
- Risk interdependence
- Qualitative risk assessment
- Quantitative risk assessment
- Risk scoring
- Risk ranking
- Risk prioritization
Module
6: Risk Appetite, Tolerance and Capacity
- Meaning of risk appetite
- Risk tolerance
- Risk capacity
- Risk limits
- Risk thresholds
- Relationship between risk and strategy
- Establishing risk appetite
- Risk appetite statements
- Risk appetite indicators
- Escalation of risk-limit breaches
Module
7: Risk Response and Mitigation
Organizations can respond to risks
through:
- Avoidance
- Reduction
- Transfer
- Acceptance
- Sharing
Other areas include:
- Risk mitigation strategies
- Internal controls
- Insurance
- Hedging
- Diversification
- Contractual protections
- Business-process redesign
- Contingency planning
DAY 3: RISK MONITORING, REPORTING AND ADVANCED ERM
Module
8: Enterprise Risk Register
- Purpose of a risk register
- Risk identification
- Risk description
- Risk owner
- Risk causes
- Risk consequences
- Existing controls
- Inherent risk rating
- Residual risk rating
- Risk response
- Action plans
- Target dates
- Key risk indicators
Module 9: Key Risk Indicators and Risk Monitoring
- Meaning of Key Risk Indicators (KRIs)
- Designing effective KRIs
- Leading versus lagging indicators
- Risk thresholds
- Risk dashboards
- Early warning indicators
- Risk trend analysis
- Monitoring residual risk
- Risk escalation
Module 10: Financial and Banking Risk Management
- Credit risk
- Market risk
- Liquidity risk
- Interest-rate risk
- Foreign exchange risk
- Investment risk
- Counterparty risk
- Capital adequacy considerations
- Stress testing
- Scenario analysis
Module 11: Operational Risk Management
- Meaning of operational risk
- People risk
- Process risk
- Systems risk
- External-event risk
- Fraud risk
- Business-process failures
- Operational risk indicators
- Loss-event databases
- Control assessment
- Operational risk mitigation
Module 12: Strategic Risk Management
- Strategic risk concepts
- Business-model risk
- Competitive risk
- Market-entry risk
- Strategic decision-making
- Mergers and acquisitions risk
- Innovation risk
- Economic risk
- Scenario planning
- Strategic risk indicators
Module 13: Compliance, Legal and Regulatory Risk
- Regulatory risk
- Legal risk
- Compliance risk
- Corporate governance
- Regulatory reporting
- Policies and procedures
- Anti-fraud controls
- Anti-money-laundering considerations
- Data protection
- Regulatory monitoring
- Consequences of non-compliance
Module 14: Business Continuity and Crisis Management
- Business continuity management
- Business impact analysis
- Critical business processes
- Disaster recovery
- Emergency response
- Crisis management
- Recovery strategies
- Business continuity plans
- Testing and simulation
- Crisis communication
Module 15: Risk Reporting and ERM Dashboards
- Risk reporting principles
- Board risk reports
- Management risk reports
- Risk dashboards
- Heat maps
- Risk trends
- Risk appetite reporting
- Exception reporting
- Escalation procedures
- Communicating risk to stakeholders
Module 16: Internal Audit and Enterprise Risk
Management
- Role of internal audit in ERM
- Assurance versus management responsibilities
- Risk-based internal auditing
- Assessing risk-management processes
- Evaluating internal controls
- Audit findings
- Corrective action
- Follow-up procedures
- Three Lines Model
MODULE 17: ERM TECHNOLOGY AND DATA ANALYTICS
- Risk-management information systems
- Enterprise risk platforms
- Risk dashboards
- Data visualization
- Automated risk monitoring
- Predictive analytics
- Artificial intelligence and risk management
- Cyber risk analytics
- Continuous monitoring
MODULE 18: ERM MATURITY AND CONTINUOUS IMPROVEMENT
- Assessing ERM maturity
- Risk-management maturity models
- Identifying gaps
- Improving risk culture
- Improving risk governance
- Integrating ERM with strategic planning
- Continuous monitoring
- Lessons learned
- ERM performance evaluation