Approaches to Risk Management

Enterprise Risk Management

What is Enterprise Risk Management? What should it look like to the Fortune 1000 CFO? Enterprise Risk Management (ERM) is best thought of us a systematic embedment process to improve risk-adjusted decision-making throughout the organization. The ERM process enables a broad array of material risk (and opportunity) to be assessed at the senior management, business, and functional unit level. Risk countermeasures (mitigation) are identified, owned by unit leaders to manage, and are visible holistically at the enterprise level. Well executed ERM, besides limiting the downside of risk, allows systematic consideration of the future and helps identify opportunities for growth.

ERM incorporates a broad array of risk. Such risks are often categorized as either strategic, business, financial/market, information, operational, and geo/political in nature.

There are a number of regulatory shifts and board of director level concerns that have generated significant interest by Fortune 1000 firms in improving its risk management across the organization. While this demand is commended and needed within the business community, successful ERM implementation does require a significant investment of time, resource and commitment. Wells Fargo Insurance Services and ABD (a Wells Fargo Company) can help you. We have specialized ERM consulting expertise to help ensure both a successful risk assessment and even more importantly, a successful ERM business embedment process.

Financial Risk Management

Many Fortune 1000 firms have dedicated departments to manage the specific financial and market risks of their firms. Such risks, for example, may include the hedging of foreign currency and commodity risk as well as the management of its trade credit financing. Financial risk management typically involves using financial instruments to determine areas of risk within the credit and market risk sectors of the business. The discipline creates economic value by using risk management tools and strategies to manage such risks. Financial risk management requires an understanding of the principles of risk management specific in the realm of finance, including risk assessment and risk management planning. The financial risk management discipline relies heavily on technologies that perform credit analysis and value at risk measurements.

Operational Risk Management

In business, effective operational risk management reduces an organization's exposure to loss resulting from both internal and external events. Such risks, for example, may include legal liability emanating from tort, contract, or statute; physical damage or business interruption at a warehouse, retail or production facility; supply base interruptions, and losses relating to workplace safety. There are a number of treatments to best manage these risks - from risk transfer (insurance) to loss prevention strategies. Our professional risk management consultants can tailor an exact program for your unique business needs.

Please See:
Our Risk Management Practice
Risk Management Consultants
International Risk Management/Global Solutions
Risk Management Approaches
Insurance

Risk Management Consultants:
For more information regarding our Risk Management professionals, please contact:
Gary Kilburg, ABD SVP & Chief Risk Officer (206-892-9247).