The Key Elements of Successful Erm

The Key Elements of Successful ERM

Element 1: Management Commitment

To be successful the elements of risk management must be felt throughout Alumina Inc (University of Phoenix. 2011). Management should have a clear understanding of what ERM is and why it's important. They should also understand the benefits of ERM. Managers at every level of the company will support ERM initiatives. The Chief Executive Officer (CEO) and the board of directors will ensure managers at Alumina Inc. are aware of ERM initiatives and are conducted on a daily basis. Management will appoint ERM leadership at every level of the company. Meetings will be conducted to get input into the organization of a strong ERM program. Management will provide the resources needed to implement ERM program.

Element 2: Communication and Consultation

Management will communicate to the lowest level in the organization why ERM is important and how it will benefit the company. Managers will discuss risk management as part of their weekly meetings. Monthly reports will be developed and distributed to the lowest level in Alumina Inc. Any high or medium status report should be accompanied with protective measures to create a safe environment for workers and customers.

The ERM leadership at every level should discuss lessons learned with other departments in the company. The leadership should focus on the Kelly Bates incident and how the company may get hit with a lawsuit because she believes Alumina Inc. caused her daughter to have cancer. Managers should determine how and why the company got to this point and how to prevent this risk from happening again.

Element 3: Policies and Procedures

Those selected, as ERM leaders for their department will have a clear understanding of the company operational mission and goals. They should have a good working relationship with co-workers and the company top-managers. They should be good communicators and have facilitator skills. They should be knowledgeable of the internal and external risk that faces the company. An ERM committee or working group will be established to discuss the risk the company face on a daily basis. Risk assessments will be conducted on a daily basis by each department. Each risk assessment report will be completed and emailed to the company operations by 09:00 am every morning.

Element 4: Training and Education

Top managers will be provided new updates and all information that's available on ERM. Managers will receive ERM training on leading ERM practices as they become available. They will also have access to any ERM websites that are beneficial to the company ERM strategic plan.