Page 89 - RISK Management IC86 Ebook

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Establishing the organization's risk management culture will
help create a shared high-level view by all key stakeholders
that will promote consistent goals, better decision-making,
coordinated efforts and greater results.

ERM implementation

n ERM treats market, credit, and operational risks as an element
in an overall risk portfolio, integrating them three ways:
1. Organizational integration
A single risk management organization, often supervised
by a Chief Risk Officer (CRO), manages all three kinds
of risk.
2. Strategic integration
To avoid duplication, over-hedging, under-insurance and
other missteps, ERM treats insurance, derivatives and
other risk transfer instruments as part of a single risk
management strategy.
3. Business process integration
ERM becomes part of the effort to optimize business
initiatives such as pricing, sourcing, investment and others.

n ERM implementation is an exercise in change management.
There will be those that embrace the change as a welcome
improvement in the management of the company

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