Risk Management Roles of Corporate Leadership

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The Board of Directors and Senior Management have a fiduciary duty to implement comprehensive monitoring systems, retention of outside consultants, investigate violations, adhere to regulations, and ensure the organization is operating per legal compliance (Bethel, 2016). Ultimately, if the Board of Directors does not do their job properly then they may suffer bad publicity, damage their reputation, and draw proxy attacks (Fraser & Simkins, 2010). Indeed, the Board cannot complete all tasks associated with organizational risk management; therefore, they delegate risk oversight to: the Audit Committee, the Chief Financial Officer (CFO), the Chief Risk Officer (CRO), and the Executive Committee (Bethel, 2016). Thus, each member of the Enterprise …show more content…

One of core functions of the CRM is establishing strategic goals, objectives, and constraints (Fraser & Simkins, 2010). Notably, risk management is a continuous process that requires organizations to systematically identify risks associated with achieving defined objectives; assess the magnitude of risks; develop mitigating actions to address risks; and monitor the effectiveness of the actions taken (United 2009). Further, risk management must provide mechanisms to identify and address special risks caused by governmental, economic, industry, regulatory, and operating conditions that continually change (Bethel, 2016). Ultimately, An ERM program should require clear and measurable strategic goals and objectives; otherwise, the organization cannot effectively identify and address potential risks (United, …show more content…

Unfortunately, businesses fail, profitability reduces, organization does not grow, and any number of other outcomes. Sadly, many ERM assessments focus on risks related to competitive strategy or the customer experience, but there are other functions, such as sourcing key components in risky regions of the world or unplanned catastrophic events that can be just as damaging to the organization (Driscoll, 2013). In fact, risk sources like organizational readiness, network services launch, asset conditions, environmental contamination, and hazardous operating environment are just as detrimental to the

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