WILSON's View on Risk Management

ERM is powerful when designed as a performance-focused activity. It's not an audit, nor a compliance process. ERM manages the barriers that prevent organizations from achieving their objectives.

Author:
Richard Wilson develops Performance Risk Management capabilities for complex organizations. He has helped the largest companies in North America manage the barriers to their desired performance.

richard.m.wilson@ca.pwc.com | (416) 941-8374

Saturday, June 2, 2012

ERM Challenge Series: #9: Risk Relationships; Treating Risks as Isolated Events

ERM Challenge #9: Risk Relationships; Treating Risks as Isolated Events


ERM Objective:
Understand the cause and effect relationship between risks.
 
The Trap:
Most companies do not have a practical, relatively simple method to understand this. The other challenge is when to perform this analysis, which is BEFORE your risk assessment.
 
The Solution:
Risks do not necessarily exist in isolation of each other, many are interconnected. If one risk occurs, which other risks may occur? Chain reactions of risk events happen, but this is rarely considered when assessing risk.
 
I have helped my clients understand their most influential “upstream” risks that can trigger “downstream” risks to also occur. Upstream risks have a larger Impact once you consider the full extent of their influence on your organization.


Conducting this simple analysis before a risk assessment will change how management scores the Impact scale.


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About The Author

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Richard is a Director in PwC's Risk Advisory practice with clients in both Canada and the United States.

He is an experienced senior executive with 15 years in a CEO or COO role (publically traded and private firms). Richard has been leading risk management implementations for more than a decade incl. 60 C-level risk assessments, and has led online risk assessments for 30,000 people in 25 countries.

He has advised the largest company in the US on risk management, and he has facilitated a risk assessment for the United Nations. Richard has been published in Compliance Week, Canadian Business, and the Globe & Mail and has been a keynote speaker on the topic of risk at many conferences in both Canada and the US since 2004.