How the BOD, Management, Audit, etc. Work Together to Accomplish ERM

ERM Governance is sometimes a barrier to enterprise risk management implementation. One way to break down this barrier is to first walk through at least one way that the Board of Directors, ERM, the management team and the assurance teams work together to make risk management an enterprise effort. Consider the attached pictorial review of one method of making enterprise risk management fit into your financial institution. 

Management and the assurance functions feed the ERMC key risk indicators, strategic priorities, risk reduction effort and resource allocation summaries. The ERMC, consisting of key members of the executive management team, assess this information on a monthly basis. The ERMC then feeds risk information on a consolidated basis to the Risk Committee of the Board of Directors. The outcome can be very powerful and eye opening for the BODs. This is just one communication method that can be very successful and coordinated. What are your thoughts on the organization of an effective ERM function?