Today, I am going to review some recent articles on risk management. Each has some good notes, which I will highlight, without hitting what I believe to be all the right ones for success.
AuditBoard is a software vendor and they have shared a whitepaper Strengthening ERM: A Key to Success in a Volatile Environment in a blog entitled Getting Risk Management Right: Making the Case for Risk Maturity. (You can download the whitepaper using a link, with registration, in the blog.)
The blog makes some points I have made before:
- …effective business leaders understand that organizations must take risks in order to be successful in a competitive business landscape.
- …higher risk maturity ratings are linked to better stock price performance, lower market volatility (and reduced insurance premiums), higher market valuation, and greater organizational resilience in response to key market events.
The question is whether AuditBoard’s idea of risk maturity is a good one. I doubt it, especially when they use artificial distinctions between strategic and other risks. If something is not a “risk” to enterprise strategies, its unlikely to merit executive and board attention. They have included Earnings Shortfall as an Operational rather than a Strategic risk, so they have lost me.
However, using a maturity model for…
