Top 12 actions for better risk management
Risk 1: Create a strategic risk PMO
As regulators remain risk conscious in the current climate, more firms are configuring strategic PMO functions and paying careful attention to setting and reviewing their risk appetite in a more dynamic manner.
1. In view of regulatory developments in the UK, EU and under Dodd-Frank in the US, create a strategic risk PMO to clarify business and operational impact for all risk functions.
Focusing risk management on the critical obstacles of protecting and growing the business in a measurable way gets risk onto the board’s and senior management’s agendas and focuses attention on material threats that can really hurt the business.
In today’s rapidly changing environment, it is likely that the critical risks firms face are moving beyond the operational focus that has characterized many “top risk” lists in the past. Firms are encouraged to identify the “big ticket” items that matter.
They should repurpose risk committees (or institute new committees) to concentrate on strategic and emerging risks in the business climate of 2011. They should also ensure that a “three lines of defense” or 3LD model is adhered to, with clear roles and responsibilities for the business and internal audit functions.
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