Here at StrategicRISK, we love a good debate about risk management. Risk thought leader, Tim Leech, has some interesting thoughts on the rebranding risk management for your Board. Tell us what you think in the comments section below!
Last month TMX, the Canadian stock exchange group, came up with what I think is real breakthrough thinking.
Instead of reporting to boards objectives outside of risk appetite/tolerance, or that have “ineffective internal control”, they pioneered the idea of “Objective/certainty” ratings. CEOs and the board receive a concise list of top value creation and preservation objectives with their “owner/sponsors”, and a very creative sliding scale visual - acceptable certainty on the left, serious unacceptable uncertainty on the right, with high impact color changes across the continuum.
ISO defines risk as “the effect of uncertainty on objectives”. COSO ERM as “The possibility that events will occur and affect the achievement of strategy and business objectives.”
This innovation is 100% technically correct. Objective certainty lays a foundation to change the image of RM/IA as something done by specialists looking to find and report problems to a core management skill - certainty management.
Since many of us prefer people that see the world as half full, instead of half empty, this one qualifies as the risk management/internal audit innovation of 2018.
Do you agree with Tim? We would love to hear your thoughts in the comments below!
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