Integrating emerging risk considerations into an ongoing risk management program is necessary to avoid future surprises, achieve strategic objectives and deliver long-term value, according to the newly published RIMS Executive Report “Navigating the Complexities of Emerging Risks.”
Based on the findings from a recent survey, members of RIMSStrategic and Enterprise Risk Council explored lessons learned from the pandemic and outlined effective practices to further support risk professionals as they work to proactively address and leverage emerging risks.
“In the face of so much uncertainty and volatility, business leaders around the world have challenged their risk management teams to identify, assess and deliver solutions to prepare the organization for the impacts of emerging risks,” said RIMS President Patrick Sterling. “And, while the scope and speed of those risks are hard to gauge, there are common practices risk professionals can integrate to empower decision-makers, demonstrate value and steer the organization in the right direction.”
KEY SURVEY FINDINGS
· 95% reported that the trigger for recategorizing a risk from emerging to active or ongoing status is understanding its impact;
· Yet, only 27% address the impact of emerging risks in their risk assessments, while less (23%) capture the likelihood of these potential unknowns;
· When scanning the horizon for future risks, only 24% look three to five years ahead; and
· Only 34% consider emerging risks during the strategy setting process.
COMMON PRACTICES
The report details the following common practices used by risk professionals to mitigate or respond to emerging risks:
· Developing risk response strategies;
· Identifying more specific emerging risk scenarios and related response plans;
· Identifying leading risk indicators for ongoing monitoring; and
· Separately considering emerging opportunities and plans.
The “Navigating Complexities of Emerging Risks” report, located in RIMS Risk Knowledge library, is currently available to members only. To access RIMS thought-leading ERM and SRM content, resources and tools, visit RIMS Strategic and Enterprise Risk Center and RIMS Risk Management Magazine.