Henry Ford is credited to have said, “Coming together is a beginning. Keeping together is progress. Working together is success.” This is so true with risk management, as you may consider bringing in different business units, policies, etc., into a culture of enterprise risk management. Institutions that understand the concept of strength from unity are able to minimize risks at all levels, and not be exposed in unfamiliar areas.
So how can this apply in your organization? Is your risk management process united across all different business lines or are there potential chinks in your armor? Are you using different guidelines to manage risk as it comes in the door, versus how you are looking at it once it is part of the portfolio, or are they closely unified in purpose?
Now don’t get me wrong, I am not saying that blind cohesion is right for every risk management issue, but getting efficiencies and consistencies can do wonders for your overall risk management process. Here are some great questions to help you evaluate where you are:
- Is there a well-understood risk management approach in place across the institution?
- How confident are you that risk management is a core competence of your institution?
- Does risk management run through the veins of the institution, or is it regarded as the domain of auditors and compliance?
A review of these questions may bring you closer to being one in purpose when it comes to your risk management processes. While that oneness may not bring you Zen-like inner peace, it will bring your portfolio managers at least a little less stress.