ken kurdziel: enterprise risk management
DESCRIPTION
TRANSCRIPT
EnterpriseRiskManagement
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Ken Kurdziel, CPA | [email protected]
JERRY SANDUSKY
• Understand the concept of enterprise risk management
• Apply examples of a well-defined risk assessment program to your organization
• Articulate benefits of a risk assessment program
Objectives
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• The process of identifying and analyzing relevant risk from an integrated, organization-wide perspective
• The concept is designed to identify potential events that may prevent an organization from achieving its operation, financial and compliance objectives
Enterprise Risk Management Defined
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“The uncertainty of an event occurring that could have an impact on the achievement of objectives.”
– Institute of Internal Auditors (IIA)
Risk: Definition
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Risk: Key Terms
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Key terms to note when evaluating risk in an organization:– Likelihood/occurrence– Impact/consequences to the nonprofit or
association
Types of Risk
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Technology Financial Operations Reputation
Strategic Human Capital Compliance Donors
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Types of Risk: Technology
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Types of Risk: Financial
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Types of Risk: Operational
Types of Risk: Reputations
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Types of Risk: Strategic
Types of Risk: Human Capital
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Types of Risk: Compliance
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Types of Risk: Donors
• Obtain strong, visible support from senior management and/or the Board of Directors
• Dedicate a cross-functional group to drive the implementation and continue to push it in the operational phase
• Closely link ERM to key strategic/financial objectives and to the business planning process
• Introduce ERM as an enhancement to well-accepted processes—not a standalone process
Attributes For Implementing A Successful Enterprise Risk Program
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Risk Assessment Activities
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Address the risks
Evaluate the risks
Analyze risks
Identify risks
Establish goals and objectives
Nonprofit Risk Universe
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Governance
Performance goals and results
Information technology/network security/data privacy
Human resources
Succession planning
Donor demographics
Safety and security
Business continuity
Financial reporting/grant
Evaluation Criteria
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Area of FocusImpact
• Financial• Stakeholder• Reputation• Legal/Regulatory• Operations
Vulnerability• Control efficiency & Operating effectiveness• Speed of response• Complexity• People• Operational efficiency• System change• Rate of change
Scale• High Risk• Moderate Risk• Low Risk
Risk Scoring During The Risk Assessment Process
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Low Moderate High
Donor Demographic
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Goals & Outcome
Identified Risks
Results
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Heat Map
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Resources
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&
Risk Management: Justification & Benefits
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Weak Controls
Risk Management: Justification & Benefits: Governance
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Vulnerability Criteria
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Impact Criteria
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