RISK MANAGEEMNT 4
identify new risks. The identification process is done through benchmarking, surveys and
establishment of the blind spots in the processes.
The difference between ERM and traditional risk management
From the interview, the difference between ERM and traditional risk management came
out clearly. The first question posed to Brooks who is the interviewee was about the difference
between the two. In his answer, Brooks indicated that risk management is a challenge or a
situation that we manage every day. He gave an example of employees such as a secretary or a
manager waking up and finds that it is snowing outside, they embark on making a risk decision
on whether to come to work or not. Risk management is about identifying whether it is safe to
drive to work, establishment of feasible alternatives and determining what you could do instead.
However, ERM attempts to facilitate the collection of information about various activities, foster
their analysis and identify connections. It also entails establishing the concentration of risks
including correlations.
The next question focused on the thinking of organizations about the probability of risk
occurrence and the potential impact. The interviewee indicated that the aspect is noble and
helpful. It helps in creating awareness about the eminent challenges the organizations face, instill
agility to risk management and assist in understanding the probability of risk occurrence. For
example, it enables people to ask pertinent questions such as how soon will any risk threaten our
business? What are the accelerants? Is there any active risk management strategy?.
The other question was about the fear that executives have relating to the formal
acquisition of information about risk from members of the staff including the management team.
Brooks indicated that the fear should not arise since the large amount of information is good for
making credible decisions on how to manage risks. Similarly, the information would foster
