Exploring Enterprise Risk Management and Organizational Culture: Part One

Tom Cooper is currently an Assistant Professor at Memorial University in the area of strategic management. As a member of the ClearRisk Board of Advisors, Tom’s research and blogging focuses primarily on the interplay between strategy, risk and compliance as well as their effects on corporate responsibility. This week Tom is shifting from his discussion of strategic risk to enterprise risk management and organizational culture.

As we all know, the concept of risk management is gaining prominence in both the corporate and academic arenas. This series of blogs explores the importance of how a risk culture achieves effective risk management practices. Focusing on how organization risk cultures develop, we need to consider the personal and organizational influences on risk culture.

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Blog Opportunities and Risk Management

For the most part, bloggers all want to do the same thing; provide value for, build relationships with, and encourage conversation within a targeted audience. With an estimated 364 million blog readers and 77-percent of all web users reading blogs in 2008, the power, influence, and potential that comes along with blogging is undeniable.

With many deciding to start corporate blogs and employee blogging initiatives, companies are hoping that sending their employees to the front lines to communicate with the public will bring openness and approachability to the organization’s image and to its relationship with customers.

As with any opportunities, there are always related risks and risk management solutions. How do you put that kind of trust in someone to speak openly and freely on behalf of the entire company? What do you do when something goes wrong? What could go wrong?

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Protecting Employees with Risk Management

Robert has been one of your most trusted employees for fifteen years. He is extremely hard working, dedicated to the organization and consistently goes above and beyond to make the company better.

While delegating tasks to your warehouse staff, Robert loses his footing and falls six feet from a platform to the floor below. He is badly hurt, spending months in recovery and is unable to return to work.

What do you tell his family? How do you replace him? What are the costs?

Unfortunately, accidents and situations like this happen far too often. Work-related injuries and illnesses devastate families and businesses with extreme financial and non-financial consequences.

In past entries, we’ve looked at employee safety-related topics like stress, liquor liability, the H1N1 flu virus and more. Today, we’re exploring workplace hazards and their associated costs and effects.

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Strategic Risk as an Element of Operational Risk

Tom Cooper is currently an Assistant Professor at Memorial University in the area of strategic management. As a member of ClearRisk Board of Advisors, Tom’s research and blogging focuses primarily on the interplay between strategy, risk and compliance as well as their effects on corporate responsibility. ‘Strategic Risk as an Element of Operational Risk’ is the fourth in this ongoing series.

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How Stress Can Hurt Your Business

While it may not always be at the forefront of our thinking on risk management, work-related stress can be extremely costly if not properly monitored and controlled. As with most risk management activities, being proactive is not only better for your employees, but it’s also better for your bottom line. Being proactive costs a lot less than being reactive.

What are the costs associated with employee stress?

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Office Holiday Parties and Liquor Liability

It’s that time of year again. The shopping days are counting down, decorations are going up, and holiday gatherings are starting to fill the calendar.

Hosting holiday celebrations for your employees can be a great way to come together, to show appreciation for their contribution throughout the year, and to unwind and celebrate the holidays. But it is important as an employer to minimize the risks associated with consuming alcohol at holiday get-togethers.

Employers in many jurisdictions have been held liable for damages resulting from employee intoxication at a company event. To prevent losses and to limit liability related to alcohol consumption at work-related events, employers should implement an Alcohol Policy.

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H1N1: What Now?

No matter where you are and what industry you work in, you probably have been affected in some way by the H1N1 virus and all the personal and business disruptions that have occurred. We’re beginning to see reports that we’ve seen the worst of the virus and that we’re on the upswing out of its grasp. Other experts are reporting that we are nowhere near to being at the end of this and that a third wave will hit this winter. With such uncertainty, many risk managers are erring on the side of caution.

Economic Impacts

There has also been some debate surrounding the effect swine flu will have on the economy. There are some indications that the virus has had little effect on the US economy. Government simulations have shown its impact as ‘reasonable and manageable’. However, it is anticipated that there could be between a 1 and 4.25-percent decrease in the country’s GDP.

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Examining Strategic Risk – ‘Strategic’ Risk or ‘Strategic Risk’ Management?

Risk management is much wider than simple financial or operational risk. Concepts such as ‘strategic risk management’, ‘integrated risk management’ and ‘enterprise risk management’ now describe the wider application of such thinking, tools and techniques.

There is a common view that strategic risk is about managing risk ‘strategically’ rather than examining strategic risk as a category similar to operational, financial and other risk areas. This common view causes confusion and may be one of the reasons that strategic risk is not further researched or specifically managed.

As outlined in my previous strategic risk blogs, one of the reasons for a lack of research is that there is no commonly accepted standard definition of strategic risk.

Much of this is no doubt due to the complexity of the concept of strategic risk, which suggests that no single quantitative measure will prove satisfactory in all strategic situations. Those risks that can be precisely quantified receive most of the attention from academic researchers, as well as corporate risk managers, while ‘soft risks’, however significant, often receive little notice (cf. PricewaterhouseCoopers 2005). In order to further the literature, the need for a common understanding on strategic risk must be developed.

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Mobile Risk: What are you really carrying with your smartphone?

Kevin Bacon had his stolen in New York, British Major General Gerry Berragan had his pick-pocketed on a train in China, President Obama may still have his hacked, and at any point in time thousands of smartphone owners could be running information-leaking viruses without knowing it.

Living in an increasingly mobile and connected world changes the boundaries and realities of risk. When you carry the world at your fingertips you take with you risks that, if not properly managed, can bring about huge loss.

Of major concern are risks surrounding viruses, theft and loss. These risks can affect the protection of employee and customer information, your company’s reputation, your intellectual property, and your competitive advantage.

How do we put ourselves at risk?

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Aon Identifies Top Three Risks in the Retail Industry

Aon recently released a report that outlined the top three risks identified by the retail industry. The report found that these top three risks were also in the list of top ten risks that the retail industry was the least prepared to face.

These risks are of concern to the retail industry because of three characteristics; their complexity, their difficulty to control, and their enterprise-wise affect and scope.

What are the top three risks?

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