Home > Risk > Aberdeen’s report on risk management includes some interesting materials

Aberdeen’s report on risk management includes some interesting materials

The Aberdeen Group is a prolific source of research on a wide variety of topics. I have a subscription that enables me to receive a number of their products without charge. One of those (offered at $399 for non-members) is “The Executive Enterprise Risk Management (ERM) Agenda”, subtitled “Mitigate Risks, Improve Performance”, by David Hatch and Cindy Jutras (a.k.a. “Mint Jutras”). The report was based on a survey of 210 companies worldwide.

I really like that subtitle. For me, risk management is all about improving the quality of decisions to deliver optimized, sustained performance and enhance organizational agility in the face of uncertainty. That is a mouthful, but it moves the focus from the mundane “protect value” to the real value – performance.

The report includes a number of observations from the survey the authors conducted:

  • 80% of the companies had increased their focus on risk management over the last 12 months
  • To be best-in-class (according to Aberdeen metrics), companies need to:
    • Integrate risk management into the organizational structure and culture, and
    • Employ analytics for monitoring and measuring risk
  • Best-in-class companies have also:
    • Standardized risk management policies and procedures
    • Established management accountability for risk
    • Incorporated risk information into core decision-making activities
    • Used technology is a key enabler for risk management
  • Only 12% of companies have an ERM program in place, with 37% working on it

Insufficient resources is a problem for half the respondents

There is a great deal more to the report than I have summarized here, with details of practices that Aberdeen believe distinguish best-in-class organizations that are able to deliver enhanced performance.

Bottom-line: at $299, this report is worth the money for risk officers.

  1. Michael Corcoran
    April 21, 2011 at 3:45 PM

    12% is very low. These companies must be doing something else like EVA to deliver on their fiduciary responsibilites to shareholders. Perhaps the study did not ask this question.

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