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Our president, James Lam, has spent 20 years in risk management. ProfessionalPresident, James Lam
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3. Our clients represent leading companies in a wide range of industries
4. As discussed in James’ recent book, we define ERM as a value added function
5.
Key trends and requirements
Best practices and practical applications
ERM in the future
Discussion outline
6. ERM is useful because the risks faced by companies are highly interdependent
7. Traditionally, risks were managed within organizational “silos”
8. ERM provides an integrated value-added approach
9. Early adopters of ERM have reported significant and tangible benefits
10. The growing acceptance of ERM is driven by four key forces
13. There is an important distinction between internal controls and ERM
14. The enterprise risk management process
15. An ERM system should address all risk types, qualitative and quantitative data, and risk monitoring and management applications
16. An “executive dashboard” based technology approach
17. An ERM dashboard should provide the CRO and senior management with full risk transparency
Compliance with risk policies and regulations
Exposures vs. policy limits
Regulatory compliance
Earnings-at-risk
Major internal drivers
Key external variables
Risk/return performance tracking
Business units
Customer segments
Products
“Right time” risk reporting
One touch visibility
Drill down capabilities
24x7 escalation
Early warning signals
18. Case study:
19. Engaged senior management and board of directors
Established policies, systems, and processes, supported by a strong risk culture
Clearly defined risk appetite with respect to risk limits and business boundaries
Robust risk analytics for intra- and inter-risk measurement, summarized in an “ERM dashboard”
Risk-return management via integration of ERM into strategic planning, business processes, performance measurement, and incentive compensation
Hallmarks of success in ERM
20.
Key trends and requirements
Best practices and practical applications
ERM in the future
Discussion outline
21. ERM will become the industry standard
CROs prevalent in risk-intensive companies
Audit committees will evolve into risk committees
Economic capital in; VaR out
Risk transfer executed at enterprise level
Advanced technologies key to advancement
A measurement standard will emerge for operational risk
Risk-based or economic reporting becomes standard
Risk becomes part of corporate and college programs
Salary gap among risk professionals continues to widen Ten predictions on the future of enterprise risk management
22.
James Lam’s contact information
Phone: 781-772-1961
Email: jameslam@comcast.net
Thank you