Enterprise Risk Management
| Date: | June 2010 |
| Author: | Clare Vincent-Silk and Alistair Byrne |
Market events over the last few years have driven fundamental changes to the profile of risk management in terms of governance and focus.
Investit Intelligence members voted for this report project in January 2010 and we have covered the following areas:
- How risk management has changed over the last two years, what have been the drivers for change and the resultant impact.
- A definition of the different risks managed by firms.
- Risk governance within investment management firms and the role of the Chief Risk Officer (CRO). We also explore the executive responsibility for risk, staffing of the risk function, objective setting and remuneration.
- Some of the key challenges faced in the practice of risk management are identified, particularly in the areas of risk assessment, risk monitoring, insurance and reporting.
- A section dedicated to investment risk explains how this risk type is incorporated into enterprise risk management.
- There is an update on risk systems, developments in risk measurement and management, and the opportunities for outsourcing.
- We discuss what we anticipate in the future of risk management.
- Best practice guidelines have been identified through the research and are outlined in the report.
Table fo contents
| Management Summary | 3 |
|
1 |
Introduction | 5 |
1.1 |
Methodology | 6 |
1.2 |
Previous research | 8 |
2 |
What is Enterprise Risk Management? | 9 |
2.1 |
What is ERM? | 10 |
2.2 |
The benefits of ERM | 12 |
3 |
How Has Risk Management Changed? | 13 |
3.1 |
Where were we two years ago? | 14 |
3.2 |
What have been the drivers of change? | 15 |
3.3 |
What has been the impact? | 18 |
4 |
Risk Governance | 21 |
4.1 |
The Chief Risk Officer | 22 |
4.2 |
Executive responsibility for risk | 25 |
4.3 |
Staffing the risk function | 26 |
4.4 |
Risk responsibilities in the business | 30 |
5 |
Investment Risk | 31 |
5.1 |
Risk management in the investment process | 32 |
5.2 |
Risk management for compliance purposes | 33 |
5.3 |
Risk systems | 34
|
5.4 |
Developments in risk management and risk measurement | 35 |
5.5 |
Investment risk outsourcing | 36 |
6 |
Risk Management in Practice | 37 |
6.1 |
Risk assessment | 38 |
6.2 |
Risk appetite | 40 |
6.3 |
Risk monitoring | 42 |
6.4 |
Insurance | 45 |
6.5 |
Reporting | 46 |
7 |
The Future of Risk Management | 50 |
7.1 |
Regulation | 51 |
7.2 |
The future of ERM and the CRO | 53 |
8 |
Best Practice Guidelines | 55 |
8.1 |
Governance | 56 |
8.2 |
Risk framework | 58 |
8.3 |
Reporting | 59 |
8.4 |
Where to go for further information | 61 |
- Press release - Investit Appoints Global CEO
- Article - Social Media: Amplify Your Communications
- Article - Making the Leap From Burning IT Platform to Safe Cost Haven (External Link)
- See all press releases, articles and event information here
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