Enterprise Risk Management is viewed favorably by rating agencies, stock exchanges, regulators and other stakeholders – this is all good news.
But some boards and CEOs remain skeptical about ERM’s value: sometimes a perception reigns that ERM is a pure cost, a governance exercise, some box-ticking event, doesn’t deliver any topline and produces nothing but a thick report that nobody reads. The ERM-journey up the risk maturity ladder requires board and management commitment, hence the question arises: what is the return on this investment, in other words how does a CRO convince the board and the CEO that ERM creates value for the company?
Over the past two years two independent, reasonably comprehensive studies have shown that there is a good correlation between good ERM-practice and a company’s valuation – in other words: it pays to do ERM !
Study No.1 says […our results suggest that ﬁrms that have reached mature levels of ERM are exhibiting a higher ﬁrm value ….] and study No. 2 comes to a similar conclusion stating that […results confirm a significant positive impact of ERM on shareholder value…].
This is very good news for all ERM practitioners, boards and executives of all companies!!
Risk Maturity Ladder is defined here
The valuation implication of ERM maturity. Mark Farrell & Ronan Gallagher, 2014
Determinants and value of ERM. Nadine Gatzert & Michael Martin; 2016
The directors of Megrow Pte Ltd are happy to announce that our Managing Director, Reto Brosi, is on board since April 01. 2016. Based in Singapore, he is very much looking forward to bringing his 20+ years experience in the insurance industry to our client’s advantage.
Margaret Lim, Director of Megrow Pte Ltd, April 2016
Boards and CEOs increasingly perceive Enterprise Risk Management as a forward looking, strategic tool.
The launch of the first “Board Risk Committee Guide” in Singapore on 31.03.2016 with 280 people in attendance was a landmark event for ERM in that respect. Great presentations and panel discussions, and most important of all: strong emphasis on ERM as a business enabler.
Precisely this enabling aspect of ERM is the focus of the work at Megrow: together with our clients we map out the risk landscape and convert the findings into opportunities.
Great to see how ERM is gaining momentum in emerging markets!
Take a look at “Enterprise Risk Management (ERM) in High-Growth Insurance Markets; The Trust Re Experience”1. I really like the emphasis on “enabling“!!
When we do ERM-related work with our clients, the opportunity-aspect gets a lot of attention.
Megrow Pte Ltd – your partner for all things ERM.
Welcome to the inaugural edition of the “Riskosity Blog”.
I created the term “riskosity”, a combination of “risk”, “velocity” and “viscosity”, under which I will share – in loose sequence – my observations and thoughts about the ever-evolving corporate risk landscape.
Reto Brosi, Director of Megrow Pte. Ltd
Megrow Pte Ltd. is a boutique consulting company working with its customers to successfully climb the risk maturity ladder. “Risk is Opportunity” guides the thinking and approach to Enterprise Risk Management and the general consulting approach.
We will regularly publish blogposts about Enterprise Risk Management here and keep you updated on major developments of our company.