5 Tips On Building Agile Risk Management Function

What are top things one should consider in building an effective enterprise risk management function?

Building A Lean Risk Culture

Soubhagya Parija Chief Risk Officer from New York Power Authority says: we are embedded in the business as decisions are made. We do not view risk management as a function that steps in when people veer from their lanes. Rather we define lost opportunity as a risk and like to work with the business to drive value. One such example is how we monetize in the wholesale market. We provided a strategy to the front office to modify their bidding strategy.

One Size doesn't fit all for Risk and Compliance

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Soubhagya Parija believes in building an agile risk practice it is importance to keep in mind one out of box approach doesnt fit every business. One should first assess the understanding of the business , its market it operates in, the size and complexity.

Identify Quantify and Mitigate Business Model Risk

Soubhagya Parija Further stresses the importance of having a solid strategy for Risk Identification, Assessing that risk and being able to take action to mitigate the risk.

Enterprise Risk Management function should not be a bureaucratic function

Dont fall prey to a Transactional Process

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Soubhagya Parija finally wraps up by saying it is easy to fall prey to a transactional process where you are generating a number of risk heat maps and updating dashboards on a regular basis from a bottoms up perspective. As far as building an agile effective risk function this should be of least concern and one should rather pay attention on being proactive in embedding the risk culture into the organization's DNA to pro actively identify and manage those risks in an integrated fashion.