Michael Saltzstein on Uniting Risk Management with Strategic Planning

Michael Saltzstein believes the ever-changing and ever-expanding needs of a business necessitate a thorough rethinking of the risk management process. A recent update to the COSO's enterprise risk management (ERM) framework offers new ideas on how companies can preserve their business's value, if not enhance it, by incorporating and examining risks from the strategy formulation stage.

This approach elevates ERM from an operational- and compliance-focused information-gathering and reporting model to a strategy-focused model that can add value to organizations. However, implementing the change is a challenge in and of itself, as organizations, particularly larger ones, are hesitant to redefine their existing ERM process without a precise cost/benefit analysis that demonstrates added value.

As Michael Saltzstein indicates, it’s important to address how risk management professionals can persuade decision-makers to incorporate risk management insights identified through the organization's ERM process into strategic planning.

Many would agree that adopting more sophisticated ERM systems improves corporate governance. In addition, there is a direct correlation between the maturity of the ERM system and the robustness of the entity's oversight and management.

Maintaining the status quo—that is, not connecting ERM with strategy and performance and not changing any business processes accordingly—may result in a critical failure that proves too costly for any company to bear, even in the most remote of scenarios. There are numerous examples of strategic corporate crises brought on by emerging risks that disrupted the organization's core business model. In other cases, unexpected low-probability but catastrophic events—"black swans"—have proven fatal to businesses when they do occur.

According to research conducted as part of the Association of International Certified Professional Accountants and North Carolina State University's Enterprise Risk Management Initiative for the 2017 Global Risk Oversight Report, companies find integrating risk into a strategy challenging. Fewer than 20% of organizations surveyed for the report in Europe, the United Kingdom, and the United States believe their risk management processes provide a distinct competitive advantage. In addition, only about half of global respondents agreed with the statement, "Companies must consider risk exposures when evaluating new strategic initiatives." The research concludes a global disconnect between enterprise risk oversight and strategy execution.

Comments

Michael Saltzstein: Strategies to Keep Good Employees

Michael Saltzstein: Effective Employee Retention Strategies Employee retention is a key issue for all businesses. In order to avoid excessive spending on replacing employees, it is important to know how to retain workers. What is an employee retention strategy? An employee retention strategy is a plan to reduce employee turnover. It consists of different programs and policies that are designed to make people want to stay with the company, explains Michael Saltzstein. This strategy is important for businesses as a high turnover rate means more money goes to hiring and training new employees. Also, if workers are unsatisfied, they have low morale, which can make some of them unproductive. By implementing effective employee retention strategies, you can save your company some money. Focus on your hiring practices The best way to retain employees is by hiring the best people for the job in the first place, notes Michael Saltzstein. Start your search for candidates with a ...

Michael Saltzstein on Effective Recruitment Strategies

Michael Saltzstein: Recruitment for the Modern Workforce images.pexels.com Hiring the right people for an organization is not just about filling open positions; it's also about finding the right fit for the job and the company culture. A good recruitment process helps identify and attract candidates who meet the qualifications and align with the values of the company. Effective recruitment and selection involve a thorough evaluation of job applicants to identify those who have the necessary skills and experience to function effectively in their role and can contribute to the overall success of the company. Businesses can increase their chances of finding candidates who are an ideal match for the job and the organization's culture by implementing a comprehensive recruitment process. Michael Saltzstein helps us get the process right. Provide what the candidates look for. With the rise of remote and hybrid work, people want to decide on their work environment and have better...

Michael Saltzstein on Making Employees Feel Valued

Michael Saltzstein: How to Show Employee Appreciation images.pexels.com Not everyone finds their dream job immediately, but many still live fulfilled working lives. Those who find fulfillment and meaning in the eight hours they spend at work every day will have greater job satisfaction and stick around for longer, notes Michael Saltzstein. That's why, if you're interested in developing a great company culture that people want to work in, making employees feel valued is a manager's most important job. Here are three ways to do it. Connect people across the company. images.pexels.com Many employees feel disconnected from their colleagues — especially during organizational growth. It often comes from a lack of understanding of what other employees do — every employee is needed, but people don't always know why and how, notes Michael Saltzstein. Letting people see, appreciate, and understand their colleagues is an excellent way to build happier atmospheres, says Mich...

Michael Saltzstein

Search This Blog