Enterprise Risk Management

In recent years a growing number of companies have begun to adopt enterprise risk management approaches in response to a variety of changing internal needs and external regulations. In order to gain a competitive position within the marketplace, many companies are developing informed risk taking measures, realizing the value-creating potential of risk. Furthermore, the implementation of Sarbanes-Oxly has forced a number of companies to develop methods for understanding and assessing the risks confronting their organization.

In response to a growing recognition for the need to create a collective risk profile, EMB has developed an ERM framework that helps companies to both identify and quantify these risks. While many companies have a long history of identifying and prioritizing risks, both before and after a disaster (e.g. the influx of catastrophe modeling after hurricane Andrew), EMB is helping these companies to understand the interactions between these various risks, creating risk profiles that make the total organization the key component to understanding the magnitude and importance of individual risks. As many companies are beginning to see a movement away from the individual risk assessment approach, there has been an increasing view that risk management can be value-creating, allowing companies to capitalize on risk transfer opportunities.

While no two companies are identical, EMB believes in adopting a flexible risk profile that can expand and grow as the company changes. A flexible ERM approach needs to be adopted in order to accommodate the vastly growing number and variety of risks that a company faces, along with the changing interactions among them. Developing a flexible and informed view to risk taking is not only a means to a competitive advantage, but a means of complying with the enduring corporate governance regulations.