RIMS executive report outlines next steps for ERM
NEW YORK (January 26, 2009) – The Risk and Insurance Management Society (RIMS) released an executive report today titled “The 2008 Financial Crisis: A Wake-up Call for Enterprise Risk Management,” petitioning a call to action for enterprise risk management.
“This is an imperative that says-in order to prevent another financial catastrophe-organizations must change the way they think about risk and consider implementing an enterprise risk management program, or improve the one already in place,” says Joseph A. Restoule, CIP, CRM, RIMS president and leader of risk management at NOVA Chemicals Corporation. “RIMS believes that the key to successful ERM practices depends on certain behavioral attributes of the organization at all levels.”
In the executive paper, RIMS contends that there were a number of behavioral breakdowns that contributed to the financial crisis. These failures include the over-use of financial models, the over-reliance on compliance and controls, the failure to understand risk tolerance and the failure to embed risk management within the organizations. Additionally, there was no governance failsafe built into risk management frameworks.
“The 2008 Financial Crisis: A Wake-up Call for Enterprise Risk Management” is available at RIMS Resource Library at www.RIMS.org/ERMwhitepaper.
About the Risk and Insurance Management Society, Inc.
The Risk and Insurance Management Society, Inc. (RIMS) is a not-for-profit organization dedicated to advancing the practice of risk management, a professional discipline that protects physical, financial and human resources. Founded in 1950, RIMS represents more than 4,000 industrial, service, nonprofit, charitable and governmental entities. The Society serves more than 10,500 risk management professionals around the world. For more information, visit www.RIMS.org.