Integrated Risk Management Strategies

The COSO ERM Cube Explained: Turning Risk into Strategic Advantage The COSO Enterprise Risk Management (ERM) framework is one of the most widely used structures for building strong, integrated risk governance. It’s not just a compliance tool—it’s a strategic enabler that helps organizations manage uncertainty and achieve their goals with confidence. Let’s break down the cube and what makes it powerful. ⸻ Three Dimensions of the COSO ERM Cube 1. Risk Components (Front Face): These 8 components represent a complete risk process: • Internal Environment – The culture and tone from the top • Objective Setting – Aligning risk appetite with strategy • Event Identification – Spotting internal and external risk events • Risk Assessment – Evaluating likelihood and impact • Risk Response – Choosing how to treat risk (accept, avoid, reduce, share) • Control Activities – Implementing policies and procedures • Information & Communication – Ensuring timely, relevant data flow • Monitoring – Ongoing review and improvement of the risk framework ⸻ 2. Risk Management Objectives (Top Face): These are the four key goals of risk management: • Strategic – Supporting mission-critical decisions • Operations – Ensuring effective and efficient processes • Reporting – Maintaining accurate and transparent reporting • Compliance – Adhering to laws and regulations ⸻ 3. Entity & Unit-Level Components (Side Face): This shows that ERM must be integrated at all levels: • Entity Level • Division • Business Unit • Subsidiary ⸻ Why It Matters: • Holistic View: The cube ensures no risk is looked at in isolation. • Scalable: Whether you’re a multinational or a startup, COSO applies. • Strategic Alignment: Helps embed risk thinking into planning, budgeting, and execution. ⸻ Final Thought: COSO’s ERM framework isn’t just about identifying risk. It’s about building an ecosystem where risk and opportunity are managed together—across all levels, for all objectives. #COSO #ERM #RiskManagement #CorporateGovernance #RiskFramework #StrategicRisk #Compliance #OperationalRisk #InternalControls #RiskCulture #Governance #BoardOversight #RiskStrategy #EnterpriseRiskManagement

Most asset failures are avoidable when risks are systematically identified and managed. After years of working with industrial facilities, I've found that effective risk management requires mastering five complementary frameworks: 1) HAZOP/HAZID: The foundation of process safety • HAZID provides early, broad-brush hazard identification • HAZOP deliversa systematic analysis of process deviations • Digital transformation now allows these assessments to feed directly into maintenance systems 2) FMEA (Failure Modes and Effects Analysis) • The comprehensive failure analysis framework • Now enhanced through digital twins that can simulate thousands of potential scenarios • Predictive models identify vulnerabilities that would be impossible to spot manually 3) CRA (Corrosion Risk Assessment) • Specialized analysis for material degradation mechanisms • Modern distributed sensing networks detect moisture ingress and corrosion in real-time • Early detection means addressing issues months before traditional methods would find them 4) RBI (Risk-Based Inspection) • The intelligence layer that optimizes inspection resources • AI algorithms now continuously recalculate priorities as conditions change • No more relying on outdated static schedules or calendar-based inspections 5) IOW (Integrity Operating Windows) • Defines the safe operational limits for process variables • Real-time monitoring ensures operations stay within these boundaries • Automatic alerts when parameters approach critical thresholds The power comes from integration. One refinery I worked with linked all five frameworks through a unified digital platform. Their system automatically flags when operating conditions might trigger corrosion mechanisms identified in their CRA, then updates inspection priorities in real-time. Is your organization still managing these as separate activities, or have you begun integrating them into a cohesive digital risk management strategy? *** P.S.: Looking for more in-depth industrial insights? Follow me for more on Industry 4.0, Predictive Maintenance, and the future of Corrosion Monitoring.

The IRM Professional Standards in Risk Management set a global benchmark for excellence, integrating Enterprise Risk Management principles across organizations. This framework defines professional standards encompassing knowledge, skills, and behavioral competencies to promote effective, ethical, and resilient risk practices. Key Highlights of the Framework: - Insights & Context: Understanding internal and external environments. - Strategy & Performance: Developing risk strategy, culture, appetite, and reporting. - Risk Management Process: Implementing risk assessment and treatment procedures. - Organizational Capability: Enhancing communication, change management, and people skills. Career Levels Covered: - Support: Foundational knowledge. - Management: Implementation proficiency. - Senior: Policy formulation and oversight. - Leadership: Strategic influence and cultural development. Behavioral Competencies: - Courage & Confidence - Influence & Impact - Integrity - Innovation - Building Capability - Collaboration Stakeholders Benefiting from the Standards: - Individuals: Facilitating career planning and self-assessment. - Employers: Supporting recruitment, training, and succession planning. - Regulators: Establishing fit-and-proper criteria. - Universities: Guiding curriculum design. The IRM framework advocates a holistic approach, integrating risk management into organizational strategy, governance, and culture to enhance sustainable performance in the face of uncertainty and complexity.

Reflections from Denmark: Risk Management Beyond Financial Services Even as I dive deep into strategy sessions here in London, my thoughts return to the remarkable conversations I had this past week in Denmark — this time, outside of the financial services sector (I already did a post on financial services in Denmark). Every risk management dialogue I had shared one core theme: geo-political risk. It’s no longer a theoretical concern — it’s operational, strategic, and omnipresent. Here are a few of the interesting risk conversations I had with leading Danish organizations: 🔹 A large global organization with heavy operations is seeking to unify enterprise risk management, project and portfolio risk, and insurable risk into an integrated, enterprise-wide perspective. Their diverse and complex operations require a holistic view of risk — from field operations to strategic planning — in order to strengthen resilience and ensure accountability across programs and regions. 🔹 I also engaged with a cybersecurity leader who echoed much of what I’ve written on the evolution of the CISO role into one of digital risk and resilience, accountable for enabling digital trust. They are heading toward an RFP — and are prioritizing risk integration in a digital risk and resilience context. 🔹 One of Denmark’s industrial companies provided one of the most thoughtful ERM discussions I’ve had in years. Their enterprise risk program is structured around objectives — identifying, assessing, mitigating, and monitoring risk in the context of achieving those objectives. While individual operational areas like cybersecurity have deeply detailed risk libraries (1500+ documented risks), the organization’s broader mantra is “collaborative assurance.” Their ERM function unites treasury, insurance, loss prevention, and enterprise risk under a shared lens of strategic objectives. They are very focused on geo-political risk front and center. We had an in-depth exchange about risk-informed strategic decision-making, and they’re actively exploring frameworks and systems that can support complex, distributed decision-making in real time that include risk management. These conversations reaffirm a truth I keep returning to: risk management is not compliance. It’s about making better, faster, and more aligned decisions in a world of uncertainty, in that context establishing objectives, and then managing risk to those objectives (as ISO 31000 states) If you're exploring how to unify your approach to risk — or build a strategy-driven, objective-focused ERM program — reach out. These are the conversations that define the future of risk management. #RiskManagement #ERM #GeoPoliticalRisk #DigitalTrust #StrategicDecisionMaking #Resilience #GRC #GovernanceRiskCompliance #RiskIntelligence

Complex, software-intensive medical devices need many design iterations during development and frequent upgrades after product launch. How can rigorous risk management keep up with all those changes? If risk assessments are managed in documents (spreadsheets) then it will be very difficult, and in some cases impossible, to manually keep all the risk information and traceability up-to-date. Instead, a platform-based approach is needed where all the risk information and key design controls information are all managed together. This is an approach I call “Dynamic Risk Management” for efficient risk assessment and tracking of risk controls in an environment of frequent design changes. The most common approach I've seen to risk management (document-based) is quite static. This means that any changes to the product design require lots of editing to the risk documents. Product teams under time pressure are then tempted to wait until the product design stops changing before compiling the risk analysis documents (with all the drawbacks of that approach).  Don’t wait until the end of product development to perform risk analysis! In this article “Dynamic Risk Management for Software-Enabled Medical Devices” I explain: 🔷 The shortcomings of the document-based approach to risk management–why spreadsheets work well initially but not throughout the product life cycle 🔷 The basic mechanics of using the platform-based approach, with dedicated software tools (“The Hub”) to manage risks and risk controls  🔷 Integration of risk management with design controls in The Hub 🔷 Documentation automation to revise documents rapidly and efficiently https://lnkd.in/eRr9sVEh This is the fourth article in a series I co-authored with Monik Sheth, founder of Ultralight Labs (now part of Greenlight Guru) Development of complex, software-intensive medical devices requires iterative design and iterative design requires dynamic risk management.

All risk is enterprise risk. Cybersecurity Risk Management (CSRM) must be part of Enterprise Risk Management (ERM). Many companies think managing cyber risks is: ╳ Just an IT problem. ╳ Isolated from other risks. ╳ A low-priority task. But in reality, it is: ☑ A key part of the entire risk strategy. Here are the key steps to integrate cybersecurity risk into enterprise risk management: 1. Unified Risk Management ↳ Integrating CSRM into ERM helps handle all enterprise risks effectively. 2. Top-Level Involvement ↳ Top management must be involved in managing cyber risks along with other risks. 3. Contextual Consideration ↳ Cyber risks should be considered in the context of the enterprise's mission, financial, reputational, and technical risks. 4. Aligned Risk Appetite ↳ Align risk appetite and tolerance between enterprise management levels and cybersecurity systems. 5. Holistic Approach ↳ Adopt a holistic approach to identify, prioritize, and treat risks across the organization. 6. Common Risk Language ↳ Establish a common language around risk that permeates all levels of the organization. 7. Continuous Improvement ↳ Monitor, evaluate, and adjust risk management strategies continuously. 8. Clear Governance ↳ Ensure clear governance structures to support proactive risk management. 9. Digital Dependency ↳ Understand how cybersecurity risks affect business continuity, customer trust, and regulatory compliance. 10. Strategic Enabler ↳ Prioritize risk management as both a strategic business enabler and a protective measure. 11. Risk Register ↳ Use a unified risk register to consolidate and communicate risks effectively. 12. Organizational Culture ↳ Foster a culture that values risk management as important for achieving strategic goals. Integrating cybersecurity risk into enterprise risk management isn't just a technical task. It's a strategic necessity. 💬 Leave a comment — how does your company handle cyber risk? ➕ Follow Andrey Gubarev for more posts like this

Risk can’t be eliminated — but it can be managed. Every organization faces strategic, operational, and external risks. The difference between resilience and failure often lies in having a structured framework. The Risk Management Framework 2024–2026 outlines how Audit Scotland integrates risk into governance, planning, and decision-making. It covers: 🔎 A 5-step process: identify → analyse → respond → monitor → report 📊 Standardized risk registers and escalation paths across corporate, business, and project levels ⚠️ A risk appetite model – defining what’s tolerable vs. what must be mitigated immediately 📑 Defined responsibilities — from Board oversight to individual risk owners 📈 A risk maturity model to measure progress from “naïve” to “enabled” organizations This framework isn’t just about minimizing threats — it also emphasizes seizing opportunities and embedding a risk-aware (not risk-averse) culture. 👉 Read the framework and see how structured risk management builds trust, resilience, and accountability. #riskmanagement #governance #audit #strategy #resilience

Why Integrated Enterprise Risk Management Matters More Than Ever In today’s complex business landscape, organisations face strategic, operational, compliance, financial, and reputational risks that can disrupt operations overnight. That’s why I found this quick reference guide on Enterprise Risk Management (ERM) built on ISO 31000 and COSO ERM frameworks to be a powerful resource for leaders, risk managers, and stakeholders. The integrated approach it highlights ensures that risk management is not a siloed activity but part of the organizational DNA, aligning with governance, strategy, and decision-making. Key takeaways from the guide include: ✔️ Defining clear risk appetite & tolerance for better decision-making. ✔️ Structured risk identification, assessment, and treatment workflows. ✔️ Using a risk register to track and document risks consistently. ✔️ Building a culture of monitoring, review, reporting, and communication to keep stakeholders aligned. For firms and stakeholders, applying the ISO 31000 + COSO ERM integrated model means: - Stronger resilience against disruptions - Better alignment between risk and strategy - Improved trust with regulators, investors, and partners In short, ERM is not just about avoiding risks, but about enabling organisations to take the right risks with confidence. If you’re a leader, board member, or practitioner, this is a framework worth embedding into your enterprise. #EnterpriseRiskManagement #ISO31000 #COSOERM #Governance #Compliance #RiskManagement #GRC

New Publication: Integrating #Governance, #Risk, #Compliance, and #Controlling (#GRC²) for Decision-Oriented Risk Management I am pleased to announce the publication of my latest research together with Prof. Dr. Patrick Ulrich: Gleißner, W. & Ulrich, P. (2025): Governance, Risk, Compliance and Controlling: Institutional, cultural and instrumental interdependencies from a German perspective, in: Corporate Ownership & Control, Vol. 22, No. 2, pp. 41-52. This study analyzes the interdependencies among governance, risk, compliance, and controlling (#GRC²) functions in German companies, focusing on cultural, institutional, and instrumental factors. An empirical survey of 247 companies highlights the importance of risk management maturity and an open risk culture for integrating governance, risk, and compliance (#GRC) into corporate decision-making. Our Key Findings: Companies with a decision-oriented risk management approach - closely linked to controlling (management accounting) - achieve above-average financial success. A purely compliance-driven GRC approach often hinders effective risk management by focusing on risk avoidance instead of supporting management decisions. We present GRC² als alternative to GRC. A GRC² approach integrates risk management and controlling to optimize the risk-return profile and support decision-making processes. Cultural openness to risk is essential: risk should be viewed as a cause of potential deviations from the plan, rather than solely as potential damage to be avoided. Conclusion: To transform risk management from a purely compliance-driven function to a decision-oriented value driver, companies must integrate risk management with controlling and foster an open risk culture. This enables risk management to support entrepreneurial decisions, optimize the risk-return profile, and enhance financial #performance. #RiskManagement #GRC #Controlling #DecisionSupport #CorporateGovernance #RiskCulture #GRC² #Risikomanagement #valuation RMA Risk Management & Rating Association e.V. ICV International Association of Controllers Robert Rieg Prof. Dr. Ronald Gleich Marco Wolfrum Ralf Kimpel Michael Jahn-Kozma Stefan Hunziker, PhD Stefan Behringer Utz Schäffer Matthias von Daacke Guido Kleinhietpaß Controller Akademie Prof. Dr. Ute Vanini Thomas Henschel Prof. Dr. Dr. Ernst Thomas Günther

🌍 Third Party Risk Management – Integrated Approach to Driving Value 🔵 In today’s interconnected world, organizations rely heavily on third parties to drive efficiency, innovation, and cost savings. But with these partnerships come risks—operational, financial, compliance, reputational, and strategic. That’s where an integrated approach to Third Party Risk Management (TPRM) becomes essential. The attached diagram 📊 of the Procurement Lifecycle beautifully illustrates how risk management isn’t a one-off exercise but a continuous, cyclical process. ⚫ Planning – It starts with strategic planning, budgeting, and needs analysis, ensuring that objectives are clearly defined. 🔵 Sourcing & Due Diligence – At this stage, suppliers are identified, inherent risks are assessed, and detailed evaluations are conducted to build confidence in selection. 🟢 Contracting – Here, SLAs, risk controls, and compliance requirements are embedded into contracts, ensuring protection from the start. 🟣 Supplier Management – Beyond onboarding, organizations must actively manage supplier performance, conduct ongoing assessments, and adapt strategies as risks evolve. 🟠 Monitoring & Oversight – Continuous oversight, SME assessments, and termination planning ensure that risk management remains aligned with organizational objectives and regulatory expectations. ✨ The value of this integrated cycle lies in its end-to-end visibility—not just mitigating risks, but also creating opportunities for efficiency, innovation, and resilience. Organizations that master TPRM don’t just avoid pitfalls; they transform risk into a competitive advantage. 📌 In the age of supply chain disruptions and regulatory scrutiny, the ability to integrate risk into every phase of procurement is no longer optional—it’s a strategic differentiator. ✅ Key Takeaway: Effective TPRM isn’t just about protecting your organization—it’s about creating long-term, sustainable value through smarter supplier partnerships. #ThirdPartyRisk #EnterpriseRiskManagement #RiskLeadership #SupplyChainResilience #ProcurementExcellence