Fundamentals of Risk Management

 6 
Provide written procedures with a clear statement of the risk appetite of the 
organization.
 7 
Agree monitoring and reporting against established objectives for risk 
management.
 8 
Undertake risk assessments to identify accumulations and interdependencies 
of risk.
 9 
Integrate ERM into strategic planning, business processes and operational 
success.
10 
Contribute to the success
of the organization by delivering measurable 
benefits.

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Risk-aware culture
291
The initial, and perhaps most important, step is ensuring that the risk management 
initiative is sponsored by a member of the board or a senior member of the executive 
committee of the organization. Information on the successful introduction of a risk 
management initiative is also available in the various risk management standards 
and frameworks discussed throughout this book.
As risk management changes and develops, the steps that will be taken by dif-
ferent organizations will change. With the emergence of governance, risk and
compliance (GRC), the risk management context has changed and developed. Risk 
management professionals need to be aware of these changes and developments and 
ensure that their activities are always fully aligned with the other activities within the 
organization. In other words, risk management activities should always be fully 
aligned with the internal context.
Although it is important to have an overall plan relating to the implementation of 
the risk management initiative, it is also vital that the risk manager identifies barriers 
to the implementation of the initiative in some detail. The potential barriers and 
enablers to the successful implementation of a risk management initiative are set
out in Table 24.2. There are many factors that will influence the effectiveness of the 
approach, including:
●
●
senior management influence within departments;
●
●
external influences, including corporate governance;
●
●
nature of the business, its products and culture;
●
●
corporate attitudes, including previous RM experiences;
●
●
origins of the risk management department.
Identification of barriers, as set out in Table 24.2, leads to the ability to put in place 
actions to overcome them. These include the fact that successful risk management 
requires the commitment of all parties and that implementation will only be as good 
as the least committed member of a department. Analysis of these barriers within the 
context of the specific organization will lead to the identification of the best options 
to ensure that risk management delivers the optimum benefits.
There is no single action that will ensure adequate implementation and no single 
timeframe by which implementation will be fully achieved. It is the experience of 
many organizations that full implementation of all stages of the approach may take 
between two and five years.
One of the important considerations regarding the timeframe for implementa-
tion will be the documentation methodology. If a comprehensive risk management 
information system (RMIS) is to be introduced, the timescale for successful and
complete implementation may be extended.