Many Enterprise Risk Management plans focus only on containing liabilities, but PwC's Stephen Zawoyski says taking certain risks can have advantages.
These variables are the risks of our business, those that can either destroy or create enterprise value. Risks impact every perceivable aspect of an enterprise; human capital, technology, security, supply chain, business partners and customers, brand and reputation, just to name a few. No aspect of an enterprise is immune to the negative impact of such risks. However, it’s equally important to recognize that in every case, risks create opportunities for those enterprises as well. Those organizations that can best understand their capacity for risk, thoughtfully determine the amount of risk they are willing to take on and articulate this risk appetite to the organization in order to manage and monitor their risks – within board approved tolerances – will be in the best position to identify early warning signs of impending risk events and respond proactively.
Consequently, risk has become top-of-mind for many boards of directors and management teams. In a natural outgrowth of that concern, many are asking, “How is our enterprise managing risk?” Both question and answer have an importance that extends not only enterprise-wide, but to regulators, shareholders, customers, partners and other key stakeholders of an organization.
PwC can help you find the right answers for your business. We’ve worked with organizations such as yours, to assess both what they’re current risk management efforts yield and what organizations of their size and industry should or in some cases have to be doing – by asking critical yet simple questions such as:
Getting to the answers helps ensure that you’re using risk in managing the enterprise – not the other way around. The clearer your understanding of the organization’s true risk profile, the better you can distinguish between “bad” risks that have to be managed and risks that present an opportunity your business can exploit. Your risk profile can become a catalyst for growth.
Want to have a conversation about ERM, or risk in general? PwC can help you develop an ERM roadmap to fit your organizations needs and culture.