The International Federation of Accountants (IFAC) has published a first class document, Enabling the accountant’s role in effective enterprise risk management.
While it is focused on accountants, primarily in Finance, the explanation of the value and purpose of enterprise risk management should be required reading for boards, executives, and practitioners as well.
Frankly, I wanted to excerpt half the booklet, but here are some of the more valuable portions with highlights by me.
To add value, accountants [and the rest of us – ndm] need to be seen as risk experts who are outward-looking and provide valuable insights to manage risk in a way that supports their organizations in responding to uncertainty and achieving their objectives.
Business requires taking risks and seizing opportunities to achieve success.
The accountant’s [and everybody else – ndm] primary role in ERM is not solely to mitigate risk, but to promote and facilitate effective risk and opportunity management in support of value creation and preservation over time. This involves being focused on the benefits of intelligent risk-taking in addition to the need to mitigate and control risk.
ERM requires information and analysis that may indicate success or failure, and support decisions around potential courses of action.
The need for…