COSO Releases Thought Paper on Enterprise Risk Management authored by Dr. Mark L. Frigo and Richard J. Anderson
ALTAMONTE SPRINGS, Fla. – January 11, 2011 – The Committee of Sponsoring Organizations of the Treadway Commission (COSO) – an organization providing thought leadership and guidance on internal controls, enterprise risk management (ERM), and fraud deterrence – is releasing thought papers relating to ERM aimed at providing guidance to help organizations advance along the ERM maturity curve.
The thought paper,Embracing Enterprise Risk Management: Practical Approaches for Getting Started, developed by Dr. Mark L. Frigo and Richard J. Anderson of the Center for Strategy, Execution, and Valuation at DePaul University, describes how an organization can begin implementing an ERM process. It also examines perceived barriers to effective ERM and how to work through those barriers.
Click here to view the thought Paper "Embracing Enterprise Risk Management: Practical Approaches for Getting Started"
About COSO
Originally formed in 1985 to sponsor the National Commission of Fraudulent Financial Reporting, COSO is a joint initiative of five private sector organizations and is dedicated to providing thought leadership through the development of frameworks and guidance on enterprise risk management (ERM), internal control and fraud deterrence. COSO’s supporting organizations are The Institute of Internal Auditors (IIA), the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), and the Institute of Management Accountants (IMA). www.coso.org
About DePaul University’s Center for Strategy, Execution, and Valuation
The Strategic Risk Management Lab in the Center for Strategy, Execution, and Valuation at DePaul University is an engagement platform for thought leaders and the business community to co-create and share leading practices in Strategic Risk Management and ERM. The Strategic Risk Management Lab provides executive education, collaborative research and advising on leading practices in ERM focused on linking strategy, risk management and governance, as well as university courses which integrate ERM and Strategic Risk Management into the curriculum. http://commerce.depaul.edu/sev/
We can assist and support management teams in conducting a Strategic Risk Assessment.
“Strategic Risk Assessment is a systematic and continual process for assessing significant risks facing an enterprise. Conducting an initial assessment is a valuable activity for senior management and the board of directors.”
Outlined below is a 7-step process for conducting a Strategic Risk Assessment. These steps are;
1. Understand the Strategy of the Organization
2. Gather Data and Views of Strategic Risks
3. Prepare the Preliminary Strategic Risk Profile
4. Validate and Finalize the Strategic Risk Profile
5. Develop Strategic Risk Management Action Plans
6. Communicate the Strategic Risk Profile and Action Plans
7. Implement the Strategic Risk Management Action Plans
To facilitate the execution of the steps, Strategic Risk Management tools and diagnostics are included at their appropriate points in the process. The steps define a basic, high level process but are intended to allow a significant amount of tailoring in their execution to reflect the maturity of the organization. The steps also reflect the fact this is an ongoing process, not just a one-time event. Reflecting the dynamic nature of risk, the 7-steps constitute of circular process or closed loop that would be ongoing for the organization.
Strategic Risk Assessment
A Process for Strengthening ERM
Dr. Mark L. Frigo, PhD, CPA, CMA
Director, Strategic Risk Management Lab
Kellstadt Graduate School of Business - DePaul University (Chicago)
Our Strategic Risk Assessment Process is designed to help risk management teams and boards to assess and manage enterprise risk and strengthen ERM capabilities and processes. A significant challenge in most organizations is to develop a practical strategy for strengthening ERM that will meet the specific needs and constraints of the organization and its environment. The Strategic Risk Assessment Process provides the initial steps for determining where and how to strengthen ERM tailored to the specific needs of an organization.
Step 1: Strategic Assessment of Current ERM Programs
This step would involves using the Strategic Risk Assessment Process to do a high-level assessment of existing risk management processes and capabilities; develop an overall Strategic Risk Profile for the enterprise; and develop an action plan for strengthening risk management processes and capabilities that will have the most impact and support the business strategy of the organization. We provide the diagnostic tools for your team to complete and can review the completed diagnostics and help develop recommendations and a description of benefits and value of strengthening ERM programs. The diagnostic tools are from the Frigo and Anderson, Strategic Risk Management Primer: A Primer for Directors and Management Teams. The tools include the Strategic Risk Management Alignment Guide and the Strategic Risk Management Maturity Diagnostic.
Step 2: Development of a Preliminary Strategic Risk Profile
This step involves developing a Strategic Risk Profile using the strategic risk assessment diagnostics in the Frigo and Anderson Strategic Risk Management Primer
Step 3: Development of a Strategic Risk Management Action Plan
This step involves developing a tailored Strategic Risk Action Plan for Strengthening ERM Programs.
Dr. Mark L. Frigo is Director of the Center for Strategy, Execution and Valuation and the Strategic Risk Management Lab in the Kellstadt Graduate School of Business and Ledger & Quill Alumni Foundation Distinguished Professor in the School of Accountancy at DePaul University in Chicago. Author of six books and over 95 articles, his work is published in leading business journals, including the Harvard Business Review. He is the co-author of the book DRIVEN: Business Strategy, Human Actions and the Creation of Wealth and the co-author of Strategic Risk Management: A Primer for Directors and Management Teams. Dr. Frigo is a recognized thought leader and advisor in strategy and risk management. He is an advisor to management teams and boards of Fortune 500 companies in the area of Strategic Risk Management. He can be reached at mfrigo@depaul.edu or 312-362-8784.
Click here to view the PDF version of Strategic Risk Assessment: A Process for Strengthening ERM
Click here to view the most recent cover article written by Dr. Mark L. Frigo and Richard J. Anderson entitled, "Strategic Risk Assessment."
Click here to get more information and to order "Strategic Risk Management: A Primer for Directors and Management Teams."
Strategic Risk Management
"Assessing and managing to protect and create shareholder value"
“The Return Driven Strategy® framework can be a useful approach for strategic risk management and ERM. This framework fully describes the business strategy and activities that drive great financial performance and makes the connection between strategy and shareholder value. It can provide a way for directors and management to evaluate strategic plans and strategic initiatives and identify key risks that could destroy shareholder value while considering the upside of risk in terms of the opportunities.” --Mark Beasley, PhD, CPA COSO Board Member, Director of the Enterprise Risk Management Initiative at North Carolina State University
Dr. Mark L. Frigo presents a keynote on “Strategic Risk Management: The New Core Competency”
