The volatility and uncertainty experienced in the global marketplace over the past few years has clearly indicated the need for organizations of all types to be better prepared to identify, measure, and manage a variety of risks. These factors, including credit, market, and operational risks, have in some instances threatened the viability of many firms and markets. The collapses of firms like Lehman Brothers and AIG have shown that liquidity, legal, regulatory, and reputational risks must also be addressed to ensure the long term viability of both public and private organizations.

Defining and implementing a firm-wide framework to manage risk is a challenge that management can no longer ignore. Enterprise Risk Management (ERM) has emerged as the leading practice for firms wanting not only to survive but thrive under this new paradigm

Professionals and practitioners with a minimum of 2 (two) years of Risk experience or 3 (six) years of experience in related fields, such as assurance services (e.g. audit, fraud investigation) and a certain category of risk management (e.g. Financial Risk, credit risk, market risk, operational risk, etc)

After taking this course, the delegates will be able to:

Understand and recognize the need for ERM

Differentiate between the components of globally accepted ERM frameworks

Appreciate the role ERM plays in effective corporate governance

Inventory the risks and responses enabled by an appropriate ERM organization

Evaluate the tools used to measure and monitor enterprise risk

Assess an ERM implementation strategy

ERM Principles

• Definition of ERM

• ERM vs. Internal Controls

• ERM vs. Risk Assessment

ERM Frameworks

• AS/NZS 4360, ISO31000

• Strategy – high-level goals

• Operations – effective and efficient use of resources

• Reporting – reliability of operational and financial reporting

• Compliance – laws and regulations

ERM for Financial Institutions

• Align risk appetite with strategy

• Enhance the rigor of the entity’s risk-response decisions

• Reduce the frequency and severity of operational risk and losses

• Identify and manage multiple and cross-enterprise risks

• Deploy capital more effectively

Role of Corporate Governance in ERM

• Accountability

• Credibility

• Transparency

• Integrity

Internal Environment – Roles in ERM for Internal Auditors

• Risk Assessment of the enterprise

• Strategic planning

• Competitive benchmarking

• SOX or similar top-down risk assessment

Risk Identification

• Identify techniques and tools used for risk monitoring

• Dealing with high impact, low probability risks

• Normal risk events and distributions

• “Tail risk” and outlier events

Risk Responses

• Avoidance: exiting activities

• Reduction: taking action to reduce the likelihood or impact – hedging

• Share or insure: transferring or sharing risk

• Accept: no action is taken (business risk)

CONTROL ACTIVITIES

• Internal and External

• Information Technology controls

• Role of policies, procedures, and documentation

Monitoring and Oversight

• Monitoring tools

• Reporting and correction of control problems

• Audit reports in the ERM framework

ERM Implementation

• Readiness evaluation

• ERM information flow and communication

• Steps in implementation process

Roundtable and Wrap-up

• Review

• Current Issues in ERM