Chimera Global Services LLC
Frequently Asked Questions (FAQ):
Exploring the Value of Enterprise Risk Management (ERM)
Below are some common questions and real-world challenges faced by many of today's corporations in their attempts to explore and implement an ERM initiative. Through our history of engagements and client relationships with many of the Fortune 500 companies, we have prepared a compelling response to each of these challenges and invite you to review, in hopes it might help you better understand and support the adoption of a best-in-class ERM effort for your organization.
01
• My firm isn’t public or a Fortune 1000 sized firm
Do you do business with public companies? Private firms can be called upon to detail how they will mitigate the material risk that they pose in their relationships with their publicly owned counterparts - particularly in supply-chain situations and joint ventures, or the like.
02
• The value enhancements aren’t immediate or quantifiable
It’s a business process. Data is required over the long term to be able to quantify the up-front investment. However, there are immediate esoteric values that can mean a whole lot more to a company than just pure dollars and cents; namely:
• Reduced capital costs
• Decreased variability in financial results
• Enhanced market reputation
• Improved decision making
• Avoiding losses or recovering from them more quickly
03
• We’ve been in business a long time through good and bad; why bother with a new process?
More credibility will be given by Rating Agencies, Lenders, Investors and your Customers to you having a documented, repeatable method and process of procedure, control and oversight over risk than your peerless track record of “experience”.
The purpose of ERM is not the process itself, but as a method for management to focus on business solutions as it treats risk strategically and operationally across the organization.
04
• It’s just another compliance layer and we have too many already – internal audit, legal, quality control, environmental, finance, etc.
An integrated ERM program can actually reduce compliance costs by aligning and streamlining with existing risk assessment, risk monitoring, risk assurance and reporting efforts to reduce redundancies and make information more useful to more people.
05
• I can’t make any money doing it
ERM programs can help you identify the “upside” of risks. Business opportunities for growth or market share exploitation can be seized when processes, reporting and discussion avenues have created greater transparency and communication in the organization. Making smarter, proactive rather than reactive decisions can improve a company’s competitiveness.