The Risk and Insurance Management Society (RIMS) recently issued a white paper entitled: The 2008 Financial Crisis: A Wake-up Call For Enterprise Risk Management, which reports that ERM could have ”identified and mitigated losses” for many of the entities affected.
The report identifies several factors that led to the crisis, including an over-use on financial models, over-reliance on compliance and controls, as well as failures in understanding risk tolerance and embedding risk management within the organisation.
Although RIMS does not endorse any specific ERM standard or framework, it believes any framework can work effectively provided it “demonstrates competency in seven behavioural approaches”. These are identified as
- Adoption of an ERM-based approach
- ERM process management
- Risk appetite management
- Root cause discipline
- Uncovering risks
- Performance management, and
- Business resilience and sustainability
The report can be viewed by clicking here.
For more insights on the issue of risk management as well as how it impacts business continuity, read: A Risk Management Approach to Business Continuity: Aligning Business Continuity with Corporate Governance.