news.cuna.org/articles/39940-five-strategies-to-drive-erm-results

Five Strategies to Drive ERM Results

Success requires changing your thinking and your actions.

April 20, 2015

Five Strategies to Drive ERM Results

To drive results and reach higher than you might have thought possible, you must change your thinking and actions, according to Tony Ferris, managing partner with The Rochdale Group. “You must treat ERM [enterprise risk management] as a competitive advantage that has to be built and woven into your credit union’s culture.”

Take time—considerable time—to build out these capabilities and your results will soar. Five strategies to drive results include:

  1. Building an ERM process and program to account for risk levels on a proactive basis. This involves the methods and processes to identify, measure (quantify), and manage risks and/or seize opportunities related to the achievement of the organization’s goals.
     
  2. Determining in actual dollar and business terms what your organizational risks, opportunities, and risk levels are. This is not, and should not be, a policy, controls, risk assessment, or audit function. This is about business decisions.
     
  3. Defining your true risk appetite in both qualitative and quantitative terms. Collectively understand how the board and management make decisions, and ensure they’re in alignment with each other. Will they allow the necessary actions to be taken to meet the organization’s goals and, more important, vision? If not, you’ll need to adjust either your risk level or your goals.
     
  4. Defining where and how you want to take risk going forward, and what risks you’ll take. Assess your performance against those desires and determine barriers to enabling the organization.
     
  5. Defining success and failure parameters by goal. In some cases, you might reward a “good” failure while in other areas you’ll want to minimize all risk.

Above all, Ferris says, talk about risk, communicate it, reward it, revisit it, refine it, and continue to question it.