Question

Is it important to review and update the Enterprise Risk Management process? Explain why.

Answer 1

When we try and answer this question, we need to consider that even the best executions are time-constrained, meaning that even though it might be the best approach currently, given that time introduces a larger number of variability the further down the line we go create the understanding that for the company to truly benefit from the process it needs to be current and up do data with both the standards of execution and the policies that are thus implemented. We can gain the following benefits from a continued revaluation and update of the policies:

1. SCALABILITY
While the scope is larger, the implementation can be scaled if we have the proper considerations from the very beginning, this makes our execution resistant to change as a result.

2. BETTER RISK REPORTING
Although it is considered an integral part of the entire process, we can say that it represents one of the most important as[ects of a holistic risk management approach. The fact that the process is evaluated continually, the organization can make sure the report has all the necessary observations for critical evaluations.

3. BEING PROACTIVE
The consideration of being proactive rather than reactive is what companies invest in today’s business landscape. How we deal with the situation has a lot to do with pre-planning and running simulations and therefore, keeping the systems up to date with all the necessary factors aids the company to become proactive.

4. REDUCING COMPLEXITY THROUGHOUT THE PIPELINE
When we consider that changes are hard for employees to get used to, we can provide a counter-argument that being actively involved with monitoring, reevaluating, and therefore changing the systems would provide a better appreciation for the designated team. Avoiding familiarity in operating the necessary mechanisms when there is an actual crisis.

5. PROVIDE A SCOPE FOR TRAINING PROGRAMMES
Training without the necessary scope is essentially the company wasting its capital in futile attempts. With older systems, the probability of facing and therefore mitigating the new threats lowers down significantly. Therefore, with the proper plan based on the changes that are brought forward by the evaluation and review process can lead to the teams developing the necessary scope in order to receive the best possible training for operating the necessary mechanisms.

Do leave a like for the answer if you found it helpful.