NU Online News Service, July 20, 1:18 p.m. EDT

Two corporate risk managers reported very different results with enterprise risk management progress in their companies during a webinar this week.

The webinar, “RIMS Benchmark Book / The Live Event,” was presented by Advisen and included live commentary from industry leaders.

“The actual process of ERM is nonexistent at Global Crossing,” says Len Resto, director, risk management for Global Crossing. “That has been despite my trying to get it to grow in that direction, but it’s been a tough sell.”

He continues that while his immediate boss is sold on ERM, “the higher up you go, there seems to be less inclination to do it.”

He adds that some of the resistance comes at the suggestion of a day or half-day workshop with ERM experts. Company management also believes they have identified their risks.

Looking at the same risks year after year, Resto says, produces many of the same risk factors. “So it’s been a tough sell and now that Global Crossing has been acquired by another company, the ERM effort is dead for the moment, but we’re hoping the new company picks it up.”

Rich Sarnie, vice president, risk management for the Great Atlantic & Pacific Tea Company Inc., says he has better news, noting that within the past six months, his company “has totally embraced ERM.”

Sarnie says he has been appointed to lead the ERM program and that so far he has made a presentation to the company’s audit committee and board “who are already asking those questions: ‘What’s your plan Rich, here at A&P?’”

He adds that ERM is “really not that complex,” explaining that his goal is to keep it simple.

The way ERM was initiated, he says, was by having each business leader in the company come to a meeting bringing a homework assignment to identify a risk that, if it happens, “will shut the door.”

About 30 risks were listed and then prioritized, he says, to determine which risks the group would work on first.

The list was narrowed to 10, he says, and the same risk management strategy will be applied to them as “on any risk, whether it’s insurable or not. Can you avoid it, can you prevent it, can you mitigate it or can you transfer it?”

Carol Fox, director of strategic and enterprise risk practices for RIMS notes that risk managers need to point out where they have saved the company money by preventing risk.

Resto agrees, pointing to his own company, where carriers had recommended improvements to a particularly vulnerable roof.

“So hurricane season comes and nothing happens and management thinks operations is doing a great job keeping the roof in repair,” he says. “So you have to remind them that this was in response to a recommendation and that this is what ERM is all about.”

Special Reports /

ERM Execution Varies By Organization, Risk Managers Report

Related Stories

Recommended For You