Enterprise Risk Management Principles Can Help Navigate Risks Triggered by COVID-19
Mark Beasley, professor of accounting and director of the Enterprise Risk Management (ERM) Initiative, spoke at a livestream event hosted by the Raleigh Chamber of Commerce on the impact of COVID-19 (coronavirus) on ERM. Beasley outlined how key concepts from enterprise risk management might provide a framework for organizing how we prioritize and respond to the most critical risks triggered by COVID-19.
“COVID-19 is highlighting the critical need for an enterprise-wide view of risk,” said Beasley. “Business leaders are able to see how COVID-19 is triggering risks across their organizations and how those risks are interrelated.”
Beasley highlighted tips for managing risks for the “Here and Now” and for later once COVID-19 is behind us.
The Here and Now
- Focus on your people first – employees, customers, suppliers, partners – get them to a place of safety and where they feel some sense of security.
- Pinpoint your organization’s most critical driver of its business value and identify your most important crown jewel for survivability.
- Identify the critical people and core processes that are needed to keep your organization functioning at an optimal level.
- Seek input from several people across the enterprise – don’t try to solve your business challenges without multiple lenses.
- Communicate often and frequently. One of the most valuable aspects of an effective ERM process is that it leads to richer and more robust conversations about risks that might impact a business.
Rebuilding After COVID-19
- Focus on near-term survivability. Gather high level analysis of the financial impact of your business and how that might affect your ability to financially sustain operations.
- Conduct basic cash flow analyses and forecasting to get a high level view of your potential financial damage.
- Engage in conversations now with key financial players who may be in a position to help patchwork your financial commitments for a short while.
- Leverage learnings from this event to build processes that will put your organization in a stronger position when the next unknown crisis appears.
- Invest in ERM processes to help you proactively manage risks that might impact your business’s strategic success for long-term survivability.