Integrated Risk Management
- Rulevox
- Sep 10, 2024
- 2 min read
What is Integrated Risk Management?
Integrated risk management is an approach to risk that centers information from all teams within an organization. This way of tracking risks includes monitoring and managing all types or risks that a company faces- including strategic, operational, financial, compliance, and reputational. Integrated risk management focuses on strategic alignment, and making risk-informed decisions that take into account the whole picture. Viewing how risks are interconnected can help give a more clear overall picture of a company’s state.
Key Takeaways
Integrated risk management is an approach to managing risk that centers information from all teams within an organization
It takes into account risks from all departments
Can help with strategic alignment and making risk informed decisions
Challenges for implementation include cultural resistance, complexity and resource requirements
Using an IRM system can help to develop a risk-aware culture within a company
Challenges In Implementing Integrated Risk Management
Designing and implementing an effective strategy for integrated risk management can take time and effort and isn’t without challenge. There is the potential for cultural resistance when changes are made to how a company operates. Departments or employees may be used to tracking their department’s risk level independently and may find it difficult to adapt to a more centralized approach. IRM systems can also be quite complex in nature, especially when implemented for larger companies. Alongside system implementation it is important that adequate training is included to ensure that all departments are aware of the proper manner and procedures to calculate and report risks. Finally, IRM systems involve a number of resource requirements. Training, technology and potentially hiring for new roles are all considerations that a company must take when planning to integrate an IRM system into their workplace. While there are many benefits to an IRM system, it’s important that the challenges associated with moving over to a new system for risk management are taken into consideration.
Building a Risk-Aware Culture with IRM
Implementing an Integrated Risk Management system can help your company to develop a risk-aware culture that is more attuned to noticing, reporting and managing risks. Having an IRM system helps to teach all employees about the importance of recognizing and reporting risks by making the process more centralized. IRM can also help companies to further strengthen their governance as the implementation and upkeep of IRM involves clear governance structures and a clear designation of roles. In turn the benefits of implementing an IRM system includes enhanced decision making by company governance as they have better insights on company risk. By centralizing risk management company’s can also achieve better efficiency in resource management and use, while also developing an increased resilience to risk overall.
Conclusion
Integrated risk management is an approach to risk that centers information from all teams within an organization. It takes into account risks from all departments within a company and can lead to a focus on strategic alignment, and making risk-informed decisions that take into account the whole picture. Some of the challenges to implementing an IRM system include cultural resistance, complexity and resource requirements. Using an integrated risk management system can help companies to develop a more risk-aware culture while also enhancing decision making, increasing efficiency in resource management and developing an increased resilience to overall risk.