A key theme of last week’s Corporate ERM meeting was the importance of communication.
We thank Walmart for hosting the Corporate ERM group in Bentonville, AR, this past week, where we were privileged to welcome four new members to the group and have a day and a half of very lively discussion. We appreciate, as well, the academic perspective Laurel Grassin-Drake of MIT’s Sloan School shared, including insight from her research on biases senior executives bring to discussions of risk at the board and risk committee levels.
- Dialogue is key. One of the recurring themes of this meeting, as with many of our recent NeuGroup meetings, was the importance of communication. One of our members even said of her strategy that she is “more interested in getting the dialogue going” on risk than in focusing on any specific risk itself. Especially in ERM, you need to be able assess risk across different business units in the organization, and the best way to do this is to open communication channels. Then you can not only discover where common and possibly hidden risks lie, but also create mitigation strategies that draw on strengths of multiple BUs.
Learn to love the numbers. Data = Romance: Establishing a baseline of ownership, size and impact of each risk is a large data-mining effort. But not all of the data need to be or even can be quantitative. Members jokingly referred to the “romance” of assigning a number to every part of risk management, but direction, outlook and a host of other qualitative factors have no less value.
Thanks again to all of the members who participated. We look forward to renewing our risk dialogue and learning more about what comes from your efforts to get more such dialogue going across your companies.
The Corporate ERM Group was formed in May 2008 to help leading risk managers at non-financial corporations, with established ERM programs, share experience and best practice in a discipline where that of financial institutions’ has dominated.