How do you adapt ERM strategies and plans to changing stakeholder priorities and risks?

Staying in constant communication with your enterprise's key stakeholders is crucial for understanding which initiatives to prioritize. While this has been historically challenging when managing cyber risks, CRQ makes the process much easier, translating technical terms into a broader business language that facilitates the necessary discussions. When stakeholders and the board tangibly understand their likelihood of experiencing a cyber event, coupled with its forecasted financial damages, they can create risk appetite levels that are more data-driven and reflective of reality, even as it evolves. Again, understanding results from constant communication, which, when it comes to cyber, involves transforming risk into financial implications.

Adapting ERM to stakeholder priorities and risks begins with understanding stakeholders, their values, perceptions, and influence on risks. Stakeholders can be internal and external parties, and tools like stakeholder mapping help identify and engage with them effectively.

Stakeholders management is critical for the adaption of ERM and value to the business. This is the only framework that work across business and provide oversight of risk’s exposure from incident (including near miss) and manages change

An effective ERM program offers corporate leaders strong support for achieving balance for both stakeholder benefits and shareholder profits by generating a more holistic, enterprise-wide view of risks that might impact the achievement of multiple objectives.

Risk appetite is vital in monitoring exposure and helps business identify the boundaries within which it needs to operate in order to deliver shareholder value.

I philosophically differ from the ‘crowd’ on risk appetite. Consistently, risk professionals will speak to risk appetite as one measure for their whole company/enterprise. Generally, most ERM professionals work at companies with some size and complexity. Given that, the organization likely has an array of risk appetites across the functions. It’s fine for a part of the larger organization that’s supposed to be taking risks (maybe R&D) to have a different risk appetite than a part of the organization that is the cash-cow or maintaining critical systems. There is trouble in just rolling these up or averaging these or even trying to monetize them. Be careful with how this is used.

Adapting ERM to stakeholder priorities and risks involves adjusting risk responses and controls based on changing risk environment and stakeholder feedback. Risk responses address or exploit risks, while controls ensure effectiveness. Tools like risk treatment, transfer, avoidance, reduction, sharing, or acceptance help select appropriate responses. Risk control design, testing, and assurance evaluate and enhance control adequacy and effectiveness.

Regularly review and update ERM processes to align with stakeholder priorities and risks. ERM is an iterative process involving planning, implementing, monitoring, reviewing, and improving risk management activities. Utilize tools like risk audits, reviews, and evaluations to assess ERM maturity and performance, identifying improvement opportunities. Incorporate lessons learned and best practices through tools like risk feedback, learning, and innovation based on stakeholder input.

In adapting ERM to stakeholder priorities and risks, clear and transparent communication and reporting of ERM results are vital. This fosters trust, credibility, and accountability with stakeholders, showcasing the value and competitive advantage of risk management efforts. Tailoring communication using risk communication plans, channels, and messages to suit various stakeholder groups' needs is recommended. Additionally, utilizing tools like risk dashboards, scorecards, and indicators helps present ERM results concisely and meaningfully.

To adapt ERM to stakeholder priorities and risks, preparing for future changes is crucial. Change, being unpredictable, can introduce new risks or opportunities. Utilizing tools like risk scanning, horizon scanning, scenario planning, and foresight aids in identifying emerging trends and uncertainties shaping the future risk landscape. Additionally, employing tools such as risk resilience, agility, and adaptability enhances the organization's capacity to respond and adapt to change efficiently.

Adapting ERM to evolving priorities & risks: 1. Continuously engage stakeholders: Regularly assess their concerns through surveys, meetings, etc. 2. Update risk assessments: Re-evaluate risks based on changing priorities and external factors. 3. Maintain a flexible ERM plan: Allow adjustments to strategies and controls as needed. ??Effective ERM is dynamic. By understanding stakeholder priorities and adapting to emerging risks, you can ensure your program remains relevant and impactful.

Consider a materiality assessment to help identify and understand the relative importance of specific strategic issues to your organization, their potential impact on your organization, and their importance to stakeholders. The key to gaining alignment on how stakeholders define the importance of strategic issues. Then, you will have better information for ERM development.

Tell stakeholders we are to help you reflect what would stop you from achieving your targets, how to measure that uncertainty and plan to manage it.