Ibm-Risk Management

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IBM Global Business Services Executive Report

Financial Management

IBM Institute for Business Value

Clearing the clouds
Shining a light on successful Enterprise Risk Management

IBM Institute for Business Value

IBM Global Business Services, through the IBM Institute for Business Value, develops fact-based strategic insights for senior executives around critical public and private sector issues. This executive report is based on an in-depth study by the Institute’s research team. It is part of an ongoing commitment by IBM Global Business Services to provide analysis and viewpoints that help companies realize business value. You may contact the author or send an e-mail to iibv@us.ibm.com for more information. Additional studies from the IBM Institute for Business Value can be found at ibm.com/iibv

Introduction

By Robert Torok, Carl Nordman and Spencer Lin

multitude of existing challenges of operating in today’s global business climate. The threat of catastrophic loss – from terrorism, natural disasters, financial mismanagement, IT security breaches, supply chain disruptions and more – demands preparedness to assure financial and business continuity. Yet recent studies suggest few companies fully understand or are properly prepared for the breadth of risks they encounter. Historically viewed as the domain of the CFO, less than 20 percent of enterprise risks are financial, legal or compliance in scope, yet all risks can ultimately have a financial consequence. Addressing the scope of Enterprise Risk Management (ERM) requires a level of organizational collaboration that culturally and practically can be very difficult to implement. The first step toward creating a robust ERM program encompasses understanding the scope of risk management and nurturing collaboration and preparedness – making it a “team sport” across the enterprise.1
Executive…...

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