From its beginnings, the value proposition of (enterprise) risk management (ERM) has been described as enabling companies to take upside risk confidently in pursuit of corporate goals and objectives. ERM was often likened to having brakes on an automobile. Just knowing that ERM acts as a ‘brake’ pedal that limits downside risks (losses, waste, and underperformance), gives organizations the confidence to step on the ‘accelerator’ pedal and pursue upside risks (growth and innovation).
Research into the state of ERM practice demonstrates that ERM programs have achieved a high degree of success in providing the ‘brake’, i.e., embedding a defensive stance against exposure to risks that would cause major losses or impede the achievement of objectives. Yet few ERM programs have been able to connect ERM to the ‘accelerator’ pedal in a way that inspires confident risk taking necessary for growth and innovation. When ERM is a strong ‘brake’ with a weak link to the accelerator, it actually can become a drag on value.
At Claridec, we believe that the failure to embed a risk lens into decision making is the main reason that ERM has not yet lived up to its full potential to help organizations maximize the value they create. Therefore integrating ERM with other methods and tools as presented on this website will unleash its full potential.