The timely release of the North Carolina State Poole College of Management’s (NC State) Enterprise Risk Management (ERM) Initiative annual report, “2020 The State of Risk Oversight: An Overview of Enterprise Risk Management Practices,”[1] coincides with the COVID-19 pandemic, for which most organizations found themselves woefully underprepared.
The report’s findings show that a majority of organizations do not consider their risk management protocols to be mature, nor do they believe there was enough being done internally to drive enterprise risk management. Now that the pandemic has exposed a variety of organizations—both public and private—as being unprepared for shocks to the system, a majority of respondents indicated that enterprise risk management would become a critical focus going forward.
The annual report uses the responses from more than 500 executives to paint a picture of enterprise risk management in globally active organizations. Below are two examples of the report’s findings:
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“Few respondents perceive their risk management process as providing important strategic value. The ongoing pandemic crisis is hopefully convincing more executives of the strategic importance of having rich insights about risks facing the organization as they make key strategic decisions.”
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“More organizations are appointing a Chief Risk Officer or creating management-level risk committees to help lead the organization’s risk efforts. That leadership is critical if an organization wants to ensure the process is ongoing and value-adding.”
