A recent NeuGroup survey shows that identifying emerging risks is done a variety of ways.
When it comes to nailing down emerging risks enterprise risk managers use a variety of tools from the tool box. According to a recent pre-meeting survey of the The NeuGroup’s Corporate ERM Group, members said they use individual contact with businesses, group interaction and meetings, as well as review outside research.
Overall, the survey revealed that just over 90 percent of respondents said their companies “have a formal approach” to identifying emerging risks.
Several companies within The Corporate ERM Group capture emerging risks as part of an ERM process, which gathers intelligence from other parts of the company. These might include quarterly ERM meetings with business units to discuss emerging risks, annual officer polls conducted by ERM, as well as annual interviews conducted by internal audit, which also uses the material to set its audit plan. A few do surveys and, the results of which are discussed quarterly or annually.
Some companies conduct an annual “bottoms-up” approach, which helps to identify both enterprise risk as well as tail risk. Here, topical agenda items are addressed, driven by globally emerging trends – by region, market, and industry, etc.
Most members utilize a dashboard that includes an emerging risk “watch list,” which depending on the company is review quarterly or annually.
There is of course no one-size-fits-all approach. With business models and strategies differing so much, it’s best to continually evolve a program until it works and feels right.