Enterprise risk management is a broad and complex discipline that reaches into every major area of an organization. While many agree with the concept of strategic ERM most have not yet been able to ease the pain. When attempting to practice ERM, organizations seem to suffer from the following challenges:

• Limited Understanding of Risks and Material impacts of Risks

• Limited if any ability to visualize the ERM process, outputs and reporting for senior executives and board of directors

• Inability to effectively communicate and articulate key risks (to boards, executives and ratings agencies)

• Limited ability to transition from cost/benefit to risk/reward

• Tools do not facilitate a demonstrable, sustainable process

• No central repository for risks management information and activity

• Limited ability to incorporate key risk information (both upside and downside) into strategic planning

While companies have struggled for years with how to define ERM, leading to multiple methodologies and approaches, the results of attempted ERM implementations have been limited effective practice and minimal value. Yet in today's economy with the globalization of business, rising expectations from shareholders and constantly increasing reforms in regulations, the corporate sensitivity to risks, risk relationships and their potential, material impact is at an all-time high.

While corporations have been getting attention and pressure from all angles to incorporate ERM, it is expected that S&P’s actions will be the ultimate catalyst to bring ERM and its long-anticipated benefits to the forefront.

We believe ERM should begin at the strategic level, with a top-down approach and be implemented holistically into an organization. Doing so can bring intrinsic, quantifiable value including:

• Better communication at the executive level

• Better, more strategic business planning

• Smaller losses in adverse times (less volatility)

• Rebounding more quickly from losses (quicker recovery)

• The establishment of better future practices (learning from mistakes)

The Riskonnect® ERM comprehensive system brings both the technology and the expertise to this emerging market.