Learn At Lunch: ERM in a New Normal ERA
Thanks to the rapid changes being brought by technology, the world is facing an era of great disruption. Urban mobility is reimagined with Uber. Airbnb is able to create the world’s largest hotel chain, without owning a single room. Banking transactions, be it opening an account, making a payment or getting a loan, all can be done on a smartphone. About 30 Internal Audit professionals attended a Learn At Lunch talk on 11 January 2018 by Mr Tay Woon Teck, Managing Director, Risk Advisory Division of RSM, to find out more about the impact of the disruptions on an organisation’s Enterprise Risk Management (ERM) framework and how risks can be addressed in a collective manner.
“Business volatility, complexity and increasing risk is dominating the landscape for all organisations. The journey is challenging and new thinking is needed if risk management is to improve resilience and enhance value creation. To sustain an organisation’s ability to create value, there is the compelling need to embrace change. Cultivating the trait of adaptability will help the organisation to keep pace with changes in the business environment,” said Mr Tay.
“In order to develop a healthy risk culture, organisations have to change their thinking and mindsets. Every employee has a role to play in implementing such a culture, by internalising the values essential for the change. In the end, the organisations most likely to succeed are the ones that possess the will-power to take on new challenges head-on to disrupt the way the businesses are run,” added Mr Tay.
Risk management can no longer be looked upon as just a box-ticking exercise. The new values-based ERM Framework, released by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in June 2017, emphasises more on risk culture as it moved away from the rule-based 2004 COSO ERM Framework.
“Moving COSO ERM to a values-based framework gives the breath of life to a body of structures and systems. For a value-based framework to make a difference, there must be trust, within the organisation and between the organisation and its customers, consultants and stakeholders. Trust is founded on competence, integrity and love. Hence, building trust requires acquiring technical knowledge, understanding ethics, and developing relationships. This is the key takeaway message that resonated with me,” said Mr Alan Goh Chek Chye, Senior Internal Auditor, Ministry of Education, who attended the talk.
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