Managing Risk in the Digital Age: Lessons and Tools
Henry Ristuccia, global leader, Governance, Risk and Compliance Services at Deloitte Touche Tohmatsu Ltd., recently discussed what risk issues are top-of-mind today for decision makers and boards of directors. Since the depths of the financial crisis in 2007 and 2008, he stated, what has been learned is "risk management programs need to have much more of an outside-in perspective with objective, externally sourced data used for benchmarking and analysis of risks to an organization." He also noted that technology, including analytics, continues to reshape risk management practices. Most of the better analytics-driven information reports/dashboards are now using visualization tools and are "connecting more of the dots" when it comes to different types of analytics or systems, thus making it easier than ever before for management to use the data. "Organizations that excel at analytics start with a good risk framework that’s tied to the four high-level risk categories – strategic, operational, financial and compliance,” Ristuccia said. "They also have a good sense of what they want to measure and how they're going to measure it, but it's critical the C-suite and the board provide direction and have ongoing interaction with the risk professionals." He concluded by exploring some of the "pain points" involving risk management that he has gathered from board members and senior managers. He stated, "There is a struggle with setting a common definition of risk – referred to by some as risk appetite – and relating that to their business." Another common concern is future talent. Among the questions to be pondered are: "Where will the work force needed for the future come from?" and "Where are they going to be located, and how are organizations going to motivate them?"
Wall Street Journal (05/08/13) Ristuccia, Henry
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