In Part 4 of our Business Case for ERM series, we will detail the 3 three crucial advantages of our Enterprise Risk Management solution that your CIO **will want** to know about.
Our ERM solution will...
Read MoreBuilding the Business Case for Enterprise Risk Management – Part 3: Pitching to the CRO
In Part 3 of our Business Case for ERM series, we will detail the 3 three main benefits of our Enterprise Risk Management solution that your CRO **will want** to know about.
Our ERM solution will...
Read MoreBuilding the Business Case for Enterprise Risk Management – Part 2: Pitching to the CFO
The last 3 – 5 years has seen significant growth in the number of risk and compliance roles within Financial Services. Alongside the growth in the number of roles, there has been a significant increase in salary costs of risk and compliance professionals. The growth in the number of roles is showing no signs of slowing down; according to a recent Financial Services employment Outlook for 2015 report from Michael Page recruitment, salaries are forecast to grow a further 10% – 30% during 2015.
Read MoreBuilding the Business Case for Enterprise Risk Management – Part 1: Pitching to the CEO
In a series of 4 posts, we will provide some key points when pitching to the CEO, CFO, CRO and CIO; building a business case for enterprise risk management.
Read MoreExecutive Briefing - March 21 - Understanding the ERM Journey
In this executive briefing, StratexSystems invites two of it’s clients to share their experiences at different stages of the Enterprise Risk Management journey.
The first client is the UK's largest financial services outsource provider, who started their ERM journey in 2006/07 as one of their drivers of rapid growth, but were forced into a u-turn by the credit crunch. They will present insights on:
- Delivering effective organisational change
- Shaping the risk culture
- Engaging constructively and proactively with the regulator
- Preparing for further regulatory change including preparations for the introduction of the FCA & PRA
The second client, is one of the UK's newest and fastest growing banks, which started their journey in 2010. They will focus on:
- Establishing a risk culture within a small but rapidly growing organisation
- Aligning the ERM agenda to the strategic agenda
- Building buy-in and engagement across an emerging culture
- Understanding some of the challenges and benefits of enabling the ERM process with software
Details
When: March 21st, 2013
Where: City of London
Time: 08.45 am
Venue: To be confirmed
Cost: Free of Charge
Keynote Speakers
Gillian Weatherill, Head of Enterprise Risk Management, Homeloan Management Limited
Kevin Pearce, Head of Operational Risk, Aldermore Bank
Register Now
The Three Key Scorecards within Risk-Based Performance Management
With the Risk-Based Performance Management methodology there are three ‘scorecards’ which we use to visualise strategy and risk management data and inform the management conversation and decision-making. The three scorecards are:
- Performance Scorecard
- Risk Scorecard
- Control Scorecard
Each of the Scorecards have a similar structure but different content. The basic structure of the scorecards show the main item, the accountability for the item and related indicators. This means that for the Performance Scorecard we would present the Organisations (or Business Unit) Objectives, the Accountable person for each Objective, Appetite Alignment status, Aggregated Objective Score (based on the underlying KPIs), Key Performance Indicators (KPIs), and KPI score.
The Performance Scorecard is designed to enable a management team to focus on the performance of the Organisation with each of the Accountable people speaking to their Objectives. Typically the Performance Scorecard is used in conjunction with the Strategy Map providing an additional level of detail.
An example of a Performance Scorecard from StratexSystems.
The Risk Scorecard would include the Organisations Key Risk, the Accountable person for each Risk, Appetite Alignment status, Aggregated Risk Score (based on underlying KRIs), Key Risk Assessment data, Current Risk Exposure (in currency value), Key Risk Indicators (KRIs) and KRI score. The Risk Scorecard is designed to enable a management team to focus on the organisation’s risk profile. It enables the management team to review the Risk Appetite Alignment, -are we operating within appetite or are we outside? It provides risk assessment data and exposure values alongside KRI status data so current risk taking can be discussed as can any emerging trends shown up from the indicators. It also highlights any mixed messages that might be coming from the risk assessment results and the indicator data. Naturally they should be giving the same message but often, particularly in less mature risk management environment, they can be different which can highlight the need for further work to embed the process and develop the knowledge, skills and culture. Again, each of the Accountable people should be in the room and around the table and speak to, and lead the discussion around their risks.
An example of a Risk Scorecard from StratexSystems.
The Control Scorecard would include the Organisation's Key Controls, the Accountable person for each Control, Aggregated Control Score (based on the underlying KCIs), Key Control Assessment data, Key Control Indicator data and KCI score. Like the previous two scorecards, the Control Scorecard brings focus to, and informs the management conversation and decision-making, in this case around the controls environment and effectiveness within the organisation. Again, each Accountable should lead the discussion about their controls.
An example of a Control Scorecard from StratexSystems.
Each of the three scorecards above have an important role in, informing the management conversation and decision-making around strategy execution and risk management. Individually, they ‘speak’ to and align each of the three lines of defence. The Performance Scorecard would be the primary tool for the First line, the Risk Scorecard would be the primary tool for the second line and the Control Scorecard would be the primary tool for the Third line. However each of the three lines are going to draw information and insights from each of the Scorecard’s and they will help reduce the silos that can be so problematic between the lines.
A key benefit of the Risk-Based Performance Management methodology is that it provides an overarching framework to bring together and align the organisation so that the strategy is delivered, sustainably and within appetite.
Banks 20 years behind in risk management…
Since we started developing the Risk-Based Performance Management approach, back in late 2006/07, we have been consistently saying that the way the financial services sector manages both strategy execution and risk management needs to be improved.
Now Corven Consulting has released a research report that found Banks are 20 years behind the aviation industry in managing risk. This finding and other key points from the report, below simply reinforce our belief that there is significant room for improvement in strategy execution and risk management.
Key points from the report are, based on 60% of the
Enabling value from a long game approach
HML, a StratexPoint user, has been on a risk management journey to make risk management part of the DNA of their organisation and in doing so, deliver real business benefits.
It should become part of the firm’s DNA and simply the way business is done – reflected in the effectiveness of management doing the right things. At a basic level, risk management is simply there to support decision making, allowing opportunities to be seized and value created.
The benefits that HML have achieved include a 94% reduction in the value of errors and a 63% reduction in the volume of errors.
Read a blog by the Head of Operational Risk and the HML Case Study.
Strategy and Risk “How to…” Webinar Series
StratexSystems is pleased to announce a four-part series of “How to…” webinars which address Strategy and Risk Management related challenges, and offer innovative solutions, expert advice and tips to overcome them. It is a chance for you to gain insight and hear how other clients have delivered robust strategy and risk management frameworks and processes enabled by our proven technology solution, StratexPoint.
These webinars are aimed at the CRO, CFO, CIO, Head/Director of Operational Risk, Head/Director of Finance, Head/Director of Strategy, Head/Director of Compliance, Head/Director of IT, and other professionals who deal with RMP/Section 166 actions, Basel 3, Solvency2, Dodd-Frank regulations etc.
The “How to…” series is as follows:
“How to… Integrate Strategy and Risk Management”
28th September 2011, 16:00 BST / 11:00 EDT
“How to… Deliver an Effective, Robust Risk Framework while responding to a Regulatory Action”
19th October 2011, 16:00 BST / 11:00 EDT
“How to… Lower Operational Losses via Risk Management”
9th November 2011, 16:00 GMT / 11:00 EST
“How to… Leverage SharePoint for Risk Management”
30th November 2011, 16:00 GMT / 11:00 EST
Updated Control Self-Assessment Dashboard
Control Self-Assessment is a key process in management risk and controls framework. Below is an updated version of StratexPoint’s very popular Control Self-Assessment Dashboard.
