Overwhelming Majority of Risk Managers do not Believe ERM can Change Organisational Behaviour

ERM, risk management, risk manager, Airmic conference

91% of the risk managers who attended a workshop hosted by Willis at this year’s Airmic conference do not see ERM as a vehicle that can change organisational behaviour.

Speaking at the workshop, Paul Maynard, Chief Placement Officer for Willis UK, echoed the sceptical feeling of risk managers in the room: “The tone towards risk management has to be set from the top and this is ultimately driven by incentivisation.”

“There should be a clear demonstration to new and existing employees of what the company is doing to manage risk. This simply represents a sensible way to run a business, not necessarily ERM,” he said. Similarly, Geoff Taylor, Executive Director, Risk Solutions Willis UK, agreed that risk management should be incorporated in employee inductions and appraisals. “It is important to understand what works in your organisation, the key is in making risk management accessible to people across the business, not just at corporate level,” he said.

Challenging the Board

According to Tom Teixeira, Practice Leader, Global Markets International at Willis Group, the only way the board can fully understand the potential size of the impact is to express the risk numerically. “In order to drive a change in company culture, financial numbers have to be used. Accurate figures are worth more to a board than red, amber and green coded responses to risk. It is mechanisms like this that help to change the culture at all levels of the organisation,” he said.

A Tailored Approach

The panel agreed that risk management must be tailored to each individual organisation if we are to avoid systemic risk emanating from a one size fits all approach. “There is not one way of doing ERM, diversity of approach is the most important way of managing risk,” explained Geoff Taylor.

About Nathan Hambrook-Skinner

Nathan Hambrook-Skinner is Director of Communications, GB, for Willis Towers Watson. Nathan has recently published …
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One Response to Overwhelming Majority of Risk Managers do not Believe ERM can Change Organisational Behaviour

  1. Greg Sosbee says:

    The Board of Directors, as representatives of the owner(s), has a duty to protect the owners’ interests. Management’s function is to implement the Board’s desires. (Unfortunately this fact gets lost in too many organizations.)

    While the Risk Management function works best with an strong statement of purpose from the Board, it is incumbent on the Chief Risk Executive to mold the ERM program to fit the organization. Once a proper ERM program is in place and adding value and providing a competitive advantage for the organization, the job becomes easier.

    If it was easy – anyone could do the job.

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