Studies Find Payback for Investing in Mature ERM Programmes

Companies that invest in mature enterprise risk management (ERM) programmes are, on average, rewarded with a 25% jump in the firm’s value according to the Risk Management Society (RIMS).

The correlation, suggesting that a mature ERM effort is worth the investment, comes in two newly-issued RIMS executive reports, entitled
‘Why a Mature ERM Effort is Worth the Investment’
and
‘Testing Value Creation Through ERM Maturity’
respectively.

“With key findings that indicate that organisations exhibiting mature risk management practices realize an increased valuation premium of 25%, risk professionals now have the documented support that is often necessary to gain buy-in from senior leadership,” said Carol Fox, RIMS director of strategic and enterprise risk practice.

“We hope these reports will spur greater investment by organisations in risk management staffing, enterprise-wide risk training and awareness, analysis, and other resources to achieve higher levels of risk management maturity – and value.”

The study’s authors used data from RIMS’ risk maturity model to assess the correlation between mature risk programmes and organisational value. The two reports discuss the attributes of a mature ERM programme, how each of those attributes impacts value, as well as a summary of the researchers’ key findings.

“The free assessment offered by RIMS and LogicManager provides a logical starting place for organisations to assess where they are on the maturity continuum and take action to create value,” said Steven Minsky, chief executive officer (CEO) of LogicManager and architect of RIMS’ risk maturity model.

“The assessment, based on guidelines set forth in the model, serves as a roadmap for improvement.”

Both RIMS executive reports are available in RIMS risk knowledge library at www.RIMS.org/RiskKnowledge.

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