Bill Wesioly, Risk Management consultant, chats with Samantha Vu, Professional Development Coordinator, about how small-to-medium sized organizations can take exploratory steps towards incorporating enterprise risk management in their operation, as well as areas of ERM that should be focused on in today’s environment.
Small-to-medium sized organizations can take their first steps to incorporating enterprise risk management by engaging the “top of the house” – key individuals within the organization - to understand the basics of risk management. Then follow up with high-level but thoughtful discussions on the key risks to their organization, what they are currently doing about them, and what they should be doing about them.
Some organizations may already be performing elements of enterprise risk management without labelling the practice as such. Business continuity programs, or human resource rules on hiring the right people, are some examples. Building an ERM upon these elements would require a few additional steps - cataloguing and prioritizing risks to the organization, documenting the best policies to protect against those risks, and then continuing to monitor.
With regards to what risk management looks like in today’s environment, Bill points out that the pandemic has made us keenly aware of risk tolerance at an individual level. He cautions against cognitive biases that have become more pronounced during these times – the optimistic bias of “it can’t happen to me”, and inversely, the neglect of probability bias where “it’s definitely going to happen to me”. These types of biases should also be kept in mind while planning risk management at the organizational level.
As we approach a new phase in our return to normal, Bill emphasizes that the major risks to watch out for in the next little while will involve managing our human resource. Specifically, the demand for remote working environments will bend the long-established structures of command and control. He also brings attention to the risk of mental health – organizations need to recognize that for some individuals, stresses and challenges brought on by the pandemic will not simply dissipate.
Bill will also be facilitating the Enterprise Risk Management Fundamentals Program taking place on June 13, 15, & 17, 2022.
