Implementing Enterprise Risk Management

CHAPTER 18ERM Dashboard Reporting

INTRODUCTION

One of the key objectives of ERM is to promote risk transparency, both in terms of internal risk reporting and public disclosure. In a Deloitte survey of approximately 1,500 cross-industry executives,¹ 86 percent identified “risk information reporting” as of high or moderate priority, making it the most highly prioritized of 13 risk initiatives. What's more, this priority was followed closely by “risk data quality and management” (76 percent) and “operational risk measurement system” (69 percent). Clearly, these executives understand that establishing a robust risk measurement and reporting system is critical to ERM success.

One of the best ways to implement such a system is with an ERM dashboard. A dashboard differs from traditional risk reporting in a number of ways, which we will discuss more fully later in the chapter. Suffice it to say for now that a dashboard provides consolidated and timely reports of risk exposures or opportunities across an enterprise. These reports offer early warnings and support preemptive actions by the board and management as well as business and functional users.

However, the term dashboard is not a particularly accurate metaphor. For the most part, automotive dashboards tell the driver what has already happened and what is currently taking place. They indicate speed the car has reached, and how much fuel remains in the tank. They do have some helpful indicators of emergency situations—such as a ...