FERMA Initiative Aims to Elevate Enterprise Risk Management Maturity

The Federation of European Risk Management Associations (FERMA) has issued a consultation paper as part of the organization's effort to elevate the maturity of the enterprise risk management (ERM) function within organizations.

The ERM discipline remains underused and undervalued in some organizations due to internal factors limiting its strategic impact, a FERMA statement said. The consultation paper, Shaping the Future: The Crucial Role of the Corporate Risk Manager, presents a series of questions to relevant risk management stakeholders focused on the following three areas.

• Corporate governance: exploring options that define the roles and responsibilities of the risk manager.
• Capabilities: proposing a capabilities framework to help clarify the role of the risk manager.
• Communication: offering guidance on how risk managers can raise their profiles and engage more effectively with key stakeholders.

The paper, which was developed by FERMA's ERM Committee, builds on the organization's 2023 white paper titled The Roadmap to Strategic Risk Management. Feedback from the current consultation process, which will involve member associations and selected key stakeholders, will inform a subsequent white paper from the ERM Committee which will be released later this year, FERMA said.

The FERMA initiative aims to help risk managers and senior management address operational and hierarchical challenges that prevent organizations from realizing the full strategic benefits of ERM in an increasingly volatile and interconnected risk landscape.

FERMA identified several major obstacles to fully benefiting from ERM, including a lack of alignment on core risk management concepts within organizations, inconsistent ERM frameworks, and communication gaps.

"The increasing importance of identifying, assessing, and mitigating potential threats to assets and operations means organizations must take every step needed to elevate the ERM function within their strategic hierarchy," Dr. Ulrich Adamheit, chair of FERMA's ERM Committee, said in the statement. "This will include reassessing ERM's position within their organizational structures, establishing more defined roles and responsibilities, and eliminating obstacles to effective strategic engagement."