Today, companies face an increasingly complex set of risks. As a result, internal and external stakeholders have increased their scrutiny of, and expectations for, managing risk — raising frequent questions around risk and how it is addressed.
All organizations face risk every day; without some risk, there are few rewards. But there are a number of actions you can take to better manage risk and optimize results.
Enterprise Risk Management (ERM) is the process of coordinated risk management that places an emphasis on cooperation among departments to manage every aspect of a company’s risks. The purpose of ERM is to assist an organization in achieving business objectives by effectively managing risk and capitalizing on opportunities.
ERM differs from traditional risk management — which looks at hazards only (negative consequences). ERM looks at hazards and business risk (negative and/or positive consequences).
ISO 31000 enterprise risk management standard
ISO 31000 is an international enterprise risk management standard that can be used by any organization, regardless of size or industry. The ISO 31000 standard recognizes that organizations do business in an uncertain world. In trying to achieve an objective, there is always a chance that things will not go according to plan, or that you will not achieve what you expect to achieve. Each action you take in achieving your objective has an element of uncertainty or risks that need to be managed. Whenever you make a decision, you’re practicing risk management.
The purpose of the ISO 31000 standard is to help managers make informed decisions and ensure they are looking at all the risks and outcomes when making decisions. The key challenge is to identify and address the factors and uncertainties that may affect objectives. ISO 31000 can help you reduce uncertainty and manage your risks, by using a systematic approach to look at all the elements that create the risk and to manage that risk through risk mitigation.
The benefits of Enterprise Risk Management
ERM programs provide both qualitative and quantitative benefits. Some of the more important benefits include:
- Creation of a more risk-focused culture for the organization, which increases the consistency and communication of risks within the organization.
- Standardized risk reporting, which creates enhanced reporting and analysis of corporate risk, and leads to better risk data.
- Improved focus, attention and perspective on risk.
- Increased chances that an organization can meet its deadlines, therefore increasing the chances that business partners will meet their goals.
- More effective activities related to regulatory affairs, compliance and audits.
- Efficient use of resources.
- More cost-effective management and monitoring of risks.
How Nationwide can work with you
Nationwide has perhaps the largest collection of agribusiness data in the country. This allows us to provide advanced analytics to identify relationships and trends to assist you in the development of an organizational-wide approach to managing risk. Our team includes experts in technology, risk management consulting, actuarial science, databases and research.
For each risk, we help you evaluate the likelihood of the event and the associated impact on your business. We work with CEOs and upper management to provide training and guidance, and to help develop a framework for the risk management process. We also:
- Help identify who should make up the cross-functional team.
- Provide a risk register for tracking various risks.
- Provide basic ISO 31000 awareness training for members of the cross-functional team.
- Help facilitate the first risk assessment/workshop.
- Give periodic support to respond to questions as they develop.
- Provide ongoing data related to specific loss or industry trends.
- Offer continued support for the enterprise risk management group.
For more information about the services we offer, please contact your agribusiness risk management consultant at Nationwide or call our risk management services desk at 1-800-260-1356.